Branching out to a changing business climate

Posted: July 22, 2014

When the weather outside is frightful, the revenues at Paul Farrell's company are delightful.

No power from a thunderstorm? Modern Group Ltd. in Bristol will sell you a generator. That's the equipment dealer's newest and fastest-growing business.

Tree limbs crashing down? Farrell, 49, says that Modern is the No. 1 worldwide distributor of Bandit brand chippers and stump grinders, due to the precarious state of the region's tree branches.

Question: So, is climate change working out for you?

Answer: It is. The electrical grid is not getting any better and the storms are coming through. I don't know what you want to call it, but the weather is changing.

Q: How has the generator business changed?

A: It's always been a government-mandated business. The government says if you have a hospital or nursing home, you have to have a generator. But the real explosion is the discretionary spending - the pizza shop, the guy selling tires on the corner, the convenience store. How much does a Wawa lose if they are out of business for a week [without power]?

Q: How's the tree equipment branch of Modern's business?

A: A lot of trees come down around here - the 100-year storms that are now coming every year. And when trees come down, they don't leave them around. It's not like Wisconsin, where if a tree falls, no one cares. Here it's got to be picked up and trimmed.

Q: Your company's initial business was selling forklifts and other warehouse equipment. How's that business?

A: The recession hugely impacted the business. If there were 150,000 forklifts sold a year in the U.S., that number was probably cut in half during the recession.

Q: Modern is entirely employee-owned. What's it like to manage that kind of company?

A: The founders of this company always said this was an open-door, open-book company and any employee has the right to come into this office at any time and ask: "How are we doing? How am I doing? How's the company doing?"

Q: Anything else?

A: The difference in the vibe. I believe the employees here do give more. I think I'm able to be more of the person I want to be. This is a company that allows me to be more of a leader. It's more personal.

Q: The employees own the business. Can they fire you?

A: I still have a board of directors that I answer to.

Q: You see the structure as a competitive advantage. How so?

A: Our future growth plans are absolutely to acquire. There are going to be a lot of businesses where the principal owner is in his 60s . . . who may not have a son to hand it off to. A company like Modern, with its structure, is in a great position to take over.

Q: Your idea of a great time is a day at the racetrack. Why do you love it so much?

A: You can spend a very enjoyable day with your family and spend $20 bucks if you want to. It's actually a sport. If you want to read and study, you can learn. There's an art to it. There's a challenge there and it mirrors business.

Q: Do you bet?

A: A $5 bet is a big bet. I did bet $25 on the Kentucky Derby winner [California Chrome]. So my biggest win was $125.

Q: Can you ride a horse?

A: No, I grew up in Gloucester City. Nobody has a horse in Gloucester City.


PAUL FARRELL

Title: President and CEO, Modern Group, LTD., since April 2013.

Diplomas: Rutgers University, business.

Home: Medford.

Family: Wife, Denise; children, Sean, 22, Ryan, 20, Conor, 16.

Resume: Recruited from Cummins Power Systems to start Modern's power systems division in 2004. First nonfamily CEO since Modern was founded in 1946.

On the side: Loves boxing (watching, not punching).

Why: There's one clear winner.

Favorite boxer: Bernard Hopkins.

His beer: Stella Artois, Yuengling Light Lager, if he's on a diet.


MODERN GROUP LTD.

Headquarters: Bristol.

Business: Distributor of forklifts, warehouse equipment, power generators and arborist equipment.

Where: Territory covers eastern Pennsylvania, New Jersey, Delaware.

2013 Revenue: About $100 million.

Owners: Modern's 320 employees.

Help wanted: Needs repair techs; actively seeking veterans.


MORE ONLINE

Paul Farrell on what happens if employees own the firm.

www.inquirer.com/jobbing


Interview questions and answers have been edited for space.

jvonbergen@phillynews.com

215-854-2769 @JaneVonBergen

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