2009 Joyce Marcel:
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-Simon Pearce
On hiring a president to run Simon Pearce:
"Until last year, Pearce was both the CEO and president of this large family-owned Subchapter S corporation. In fact, he was so deeply involved with its day-to-day management that he had no time for creative "doodling" or experimenting with new products. Then, just before the recession hit, Pearce kept his CEO job but hired Rob Adams, 41, to be the company's president.
"I'm not sure he would have taken the job if he knew what we were getting into," Pearce said. "On the 18th of September AIG announced it was failing, and from there you could watch our sales stop and then decline steadily. But having Rob has just been fantastic. It's changed my life and the company's life. I'm not good at running a business, and I know that about myself. I can do it and I can get by. But my real strength is creativity, designing, ideas, the bigger picture, thinking - that's what I'm good at. If you have someone else who is really good at the other piece of it, the day-to-day, hiring good people, setting goals, holding people accountable - that's what you need in business, especially when you're employing 300 people and the overhead is huge and everybody has to perform.""
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"During the last recession, Pearce felt that he did not act quickly enough.
"We had a much smaller recession and I thought it wasn't going to be a big deal," Pearce said. "We kept all our people. If you have to let a glassmaker go, you've probably spent five or 10 years training that person. And then you have to start all over again with someone else, so you're very reluctant to cut back on glassmaking because it's so difficult to gear it up again. And obviously, one hates to let anyone go. So we didn't really react well the first time, and we had built too much inventory, and we got ourselves into quite a pickle, and it took us some time to sort it out."
This time he reacted much more quickly.
"I was more wary," he said. "I didn't realize it would be this bad, but I reacted much sooner. Actually, I acted ahead of it. I had a feeling that things were looking not good, so in March, before the September crash, we cut back. And then, when it hit, we did the cuts we had to - we laid off 50 people out of 350. They weren't all glassmakers. Only some of them were. But we looked at the company and said, 'We have to do something right now.' And we did. And if we hadn't, I'm not sure we'd be here today."
The company's bank was willing to make credit available, but that meant debt.
"Our bank worked with us and gave us some more working capital with some pretty tight conditions," Pearce said. "And we met them, and we're slightly ahead in terms of repayment. But it's only because of how much better we're running the company. We've made huge cuts in terms of overhead and costs. We didn't have a nice reserve fund sitting there to see us through a hard time. Obviously, now that's our goal."
The company saw its sales drop about 10 percent, but others in the luxury market have been hit much harder.
"Really, 10 percent is not bad," Pearce said. "But everything's geared to going forward or staying the same, not going backwards."
According to Adams, the recession has now turned the corner.
"Two weeks ago, we went psychologically from survival to recovery," Adams said. "Across all of our businesses, I feel a momentum shift. It's like the worst of the bleeding is stopped. We're past triage. It's time for recovery. And what has saved us is that we have cut more cost than the revenue that we lost without negatively impacting customer service – in fact we've improved it by cutting out fat and doing 'best practices.' We talk about that a lot."
For Pearce, the recession has had a silver lining.
"We have learned to run our business so much efficiently and so much smarter," Pearce said. "And having Rob on board, when we get through this, we will never go back to our old ways. We will run this company so much more efficiently, and so much more profitably because of that, so we can have our debt cut down and have some reserves, so in the future we'll be in a much stronger position." "
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On Hydropower:
"Pearce wanted three things from a new location, and he wasn't inclined to compromise.
"First, I wanted to go someplace where it was beautiful to live and work," he said. "Second, somewhere where we could make our own electricity - which meant hydropower. Glass is so energy-intense, and in those days people were talking $100 a barrel. It seemed unthinkable, although it's since gone over that. The third was someplace where we could do a good retail business. Because I'd learned that when you're making things by hand in a small craft business, every piece you can sell directly to the customer is a huge advantage."
Pearce had already visited Vermont with a friend and made a mental note of its rivers, dams and abandoned mills. But New York State was offering significant incentives to small businesses, so he first examined some of the tributaries of the Hudson River.
"I found some lovely places to live and work and I found some hydro sites," he said. "But I never found anywhere with those two a place where I could do good retail business. So eventually I found the mill in Quechee. When I first saw it I fell in love with it and said, 'This is absolutely perfect.'""
Photo ABJ Seattle Glass Online
On furnaces:
"His biggest obstacle was that he had to design and build the correct type of furnace.
"And I was not a furnace engineer," he said. "Making high-quality clear glass is another whole level of difficulty from making colored glass. I had to build 16 furnaces before I figured out how to do it properly. I was able to get glass out of the others, but it was a lot of seconds, some of it was tinted, and it had cord and bubbles and stone and everything you could imagine. We finally figured out how to do it on a small scale. So our technology is very sophisticated, even though it doesn't look it. To buy a little furnace like the ones we use here would probably cost you $2 million or $3 million. We build them for a fraction of that, of course. But they work very well. The one you buy might not even work properly on this scale. There's no guarantee. It's a very complex business." "
Marcel, J. "Simon Pearce. The man and the company." Vermont Business Magazine. October 14, 2009. Accessed October 26, 2009. http://www.vermontbiz.com/article/october/simon-pearce-man-and-company
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