Empire of vans: what the business of a major US freight carrier looks like

Do you dream to found a family company for a full due? Read the story of American U-Haul, perhaps you'll change your mind.
Origin source
Joe Sean in a black shirt proprietary U-Haul and black pants sitting in the negotiation, where there is a meeting. It is the center of attention. Suddenly his cell phone rings: Brenda, the client from the state of Michigan, is going to move to Florida, but manager U-Haul moving company does not want to talk to her and hangs up - she was outraged. Sean something fast writes, brings her apologies and explained exactly where to uhaul.com website it can find a list of self-service warehouses with air-conditioning. Later he calls Mike Kayniali, vice president of sales and customer service, and asks him to take control of this matter. He is associated with the local manager of the company.

The long-term CEO Amerco, U-Haul parent company, 66-year-old Sean is responsible for such calls (on average there are three per day, but it happens and ten per hour), after said personal number at the TV show Inside Edition in February 2008. Then he had to respond to complaints about the quality of transport U-Haul after a series of accidents caused by breakdowns and were recognized imbalance of old trailers. Sean thought that the problems could have been avoided ifto local company managers were instructed to customers in more detail. "They can not establish the normal operation of the company - then said Sean. - And I can. "

Other CEO in his place immediately after the broadcast would be entrusted to the assistant to have for themselves a different number. But not Sean. He not only changed the number, but eight years later continued to personally respond to every call, though sometimes by e-mail, and ordered all control posting your phone number in garages, warehouses, along the perimeter fence and print business cards. (Doubt Call yourself:?. +1 602 390-6525) This is a direct relationship with the customer, he said, allowed to introduce such innovations as special boxes for transportation of LCD TVs, clock access to warehouses and written instructions for customers, explaining how correctly connect and disconnect the trailer.

But the angry customer calls at night - nothing compared with what Shawn has suffered for the sake of the company. His family and the U-Haul, which his father Leonard Samuel and Mary the mother of Anna founded in 1945, were at the center of one of the most unsightly family skandhasals in American history. Realizing that the father can not cope with the management of the business, in 1986, Sean took matters into their own hands, that landed him a barrage of accusations and dirty war unleashed reputational.

Father Joe and even accused his younger brother Mark's involvement in the murder of their daughter, and in 1994 in an interview with Forbes named Joe insane.

Opponents Sean Sr. also claimed that the father himself is suffering manic-depressive psychosis, and he really committed suicide in 1999. There were allegations of financial mismanagement were the bankruptcy case. Only the last lawsuit was settled in 2012, U-Haul and get rid of the nightmare of civil strife.

Family squabbles had to delete U-Haul to the ground, and the script is almost done - the company did not give credit, from her left talented and strong partners. But Joe was able to maintain control and to stabilize the situation, meticulously going into every detail of the troublesome business - the provision of relocation services (rent of vans, trailers, warehouses for storage of personal belongings). "Joe's peculiar way of management. I would call it "does notKeep it safe and indulge the customer, "- says Professor Amy Hillman, Dean of the Business School of the University of Arizona, wrote the case in the history of this company. - We live in an age when many managers and senior managers have become celebrities. Joe is not one of them. "

That's really really! Torture survivors TV shows, books and newspaper articles, savor the bloody drama in his family, Sean tries to keep quiet. It is rare to reporters, avoiding the attention of Wall Street, refusing to speak to investors and analysts. The company takes part in only one conference on investment in a year, and only two analysts include in their reviews of this company with a market capitalization in excess of $ 6 billion.

But the amazing story of U-Haul is noteworthy. Under the watchful control of Joe U-Haul has become a leader in the removals market. In 2015 fiscal year (ended in March 2015 th) its fleet consisted of 135 000 107 000 vans and trailers (trailers), the increase for the year - 17 000 units. By comparison, its competitor in the US, the company reported on Avis 22,000 vans in 2014 (5,000 less than in the previous two years), in the parkanother competitor Penske about 15 000 vans and 25 000 units of cargo commercial vehicles.

After August 2012, the last family disputes were resolved, the parent company AMERCO, which also has a growing business and a small warehouse insurance division achieved a record turnover of $ 3.1 billion (including $ 2.2 billion brings the core business - transport rent self-moving) and income of $ 357 million, an increase of 23% and 74% respectively compared to the 2012 fiscal year. In the first nine months of the financial year 2016 (started in April 2015) sales increased by 6.6%, net profit - by 26%. Amerco shares are included in the top 5% of the securities on the Nasdaq, the cost of placing increased by 255% to $ 333 m, despite the fact that they fell to the present time by 24% compared with a peak in November 2015. "We all like a mountain from his shoulders fell. It was an incredible relief, "- says Sean, who, thanks to its 17.6% share in the strength of the company is now the state of $ 1.2 billion, however, he can not afford to relax.. "For me, every day business is getting hardere, - he says. - We are growing, but we must continue to be accurate in detail and very careful. "

Based company, LS Sean and his wife, Anne Marie. They met in 1943 in Portland (Oregon). LS studied at the doctor at the University of Oregon, and Mary was a student at the nearby University Marylhurst. The university LS nurtured a variety of enrichment plans, for which he received the nickname of "opportunist". Less than a year before he was released, but was expelled for having responded to the roll call on the absent friend's name.

Having ceased to be a student, he was going to war. But before going to the camp for recruits, LS married Anna Mary. On the field of battle he did not hit, because he was struck by a serious illness: boot camp caught scarlet fever, and later he developed rheumatic fever. WWF sent him for treatment in California, where he stayed until 1945, when he was the reserve.

At this point, the couple had already 4-month-old baby Sam, and, according to a corporate legend, they would like to rent a trailer to move back to Portland, but that they are not removedsmiling. In the end, they went long and hard the road and came up with his business and gave him the name of the U-Haul. The young family settled on a ranch parents Anna Mary an hour's drive from Portland, and gathered all her savings - $ 5,000 (in today's prices it's $ 65,000), he founded the company. Initially LS trailers bought in the secondary market, but they often broke, and they were expensive to repair, and then he learned welding, and began to repair them yourself. Then he traveled all nearby gas stations, urging owners to take it for rent Trailers for commissions. the post-war baby-boom time in the United States was perfect to start this business. Economic growth and development of the road network on President Eisenhower's program contributed to urban sprawl in breadth and growth of population migration. Americans often moved, and rental trailer U-Haul one-way become part of their lifestyle. Company name became a common noun as later name Xerox and Google.

The life of the young couple was cloudless until 1957, when Mary Anne, who had congenital heart disease, died at the age of 34. By the time she was already six children,each inherited some of the 50% stake in the company of the deceased, the proceeds of which amounted to $ 6 million (approximately $ 50 million in the prices of 2015), and the park consisted of 22,000 trailers. In fact, the death of Anna Mary shattered not only the property but also split the family.

A year later, LS, spends most of his time on the road, he married Suzanne Gilby, the daughter of a neighbor who was much younger than him, and immediately after the wedding, sent elder sons Sam and Mike (12 and 10 years, respectively) in the boarding school in California. The following terms of age, 8-year-old Joe, and 6-year-old Mark stayed at home in Oregon and much closer. Second marriage at LS has five children were born, and the family moved to Palm Springs (CA), and then - in Phoenix, which is still the headquarters of the U-Haul. After 20 years of marriage, the couple divorced, and LS was married four times, including twice - by the same woman. Its shares LS gradually transferred to children, and at the time of his suicide was no longer owned by the company.

Business was not always successful. Severe tests he underwent in the 1970s, when the country was going through difficult consetions of the oil crisis (in 1973, after the Yom Kippur War, the Arab countries - oil producers decided not to supply oil to the countries-allies of Israel, as a result prices have risen four times). Came the end of the partnership with the gas stations that suffered losses and reduced staff. LS started buying the premises and open their own garages and warehouses, in particular, in 1975 he bought the premises in 1000 dealerships Chrysler, which was on the verge of bankruptcy. This meant a change of business model and led to increased costs. It was during these years older children, LS started working in the company on a permanent basis. Prior to this, many of them had to work in it occasionally, but the father insisted that they have taken full-time positions. Joe joined the team in 1973, immediately after graduating from Harvard Business School, where he wrote a paper on the economy of self-service stores. Around the same time I came in the company of older brothers Sam, giving up a medical career, and after him, and Mike, a lawyer by training.

Then came the first disagreements between the brothers, who began to intrigue, seeking toassume new positions and insisting on the development of various lines of business. Dr. Sam (as he was called, although he also holds an MBA from Harvard), as a rule, supported the line, which was held by LS, and be seen as the main heir of his father. As for Joe, he exhorted them all, that the company is moving in the wrong direction. He believed that it is necessary to deal with, as before, only the rental of vans and trailers to the same he did not like to work in the shadow of his older brother Sam. In 1978 he left the company, he entered the law department of the University of Arizona, and a year later founded the Space Age Auto Paint, which sold paint for cars, boats and airplanes. (Incidentally, he still owns the business, and U-Haul is his client.) With his younger brother Marc (with whom he grew up in Oregon) and he opened a small print shop, the customer which, again, was the U- Haul.

While Joe and Mark were engaged in their own businesses, LS was looking for new sources of revenue. He developed the Centers U-Haul, where it was possible to rent anything from mobile homes and machines for sanding floors to guideolyzh and equipment for picnics, including tents, flooring for dance and dishes. Loss of focus, however, was not slow to affect the finances: in 1986 net profit fell to $ 9.2 million, in 1987 - to $ 2.2 million, despite the fact that just a few years ago, it reached $ 42 million, the debt in this period It ballooned to nearly $ 600 million. It was necessary to cut thousands of jobs.

Believing that his father is destroying the company, in 1986, Joe made a coup, forcing the LS, which was seventy, retire. Father handed the post of chairman of the board, Joe, but his long-term ally, Sam was CEO. Farewell to the LS it was noted festive party.

However, the situation was getting worse, and less than a year later, Sam, that did not work with Joe, left the company. At that time, he and his father still had enough votes, and they appealed to the investment bank, to ventilate the possibility of implementing its package. Learning of this, Joe was furious: he feared a hostile takeover. He convinced the board of directors to decide on the additional issue of shares in 8099 and distributed them among the five directors who aremost received more votes in the Council. In response to Joe and LS applied to the court to appeal against this maneuver, and demand compensation for damages in 1988. Joe responded by terminating the contract with the father of lifetime employment.

Next - worse. Sixth August 1990 Sam's wife Eve was found dead at his home in Telluride (Colorado), it was shot in the back.

LS and Sam were confident that in fact the victim was supposed to be Sam and killed her mercenary hired Joe and Mark.

Do not doubt this, LS Sam was offered $ 250,000 to anyone who finds the killer, and in December 1992, told about this bloody drama throughout the country in the television show Unsolved Mysteries. LS tried to prove that the killers were his sons, but in reality transmission helped authorities find the real killer. It appeared to be a serial sex maniac Frank Marquis, who himself spoke about this crime one of his relatives. The Marquis made a deal with the investigation, voluntarily gave evidence that he was not hired, and got life for murder in 24 years. He was released early in 2011.

Sam still notHe believes that the killer was a marquis, or rather, that he was the sole killer. "I do not believe that it did Marquis. But if true, it is, he was not alone, "- he believes. Joe Mark involvement in the murder deny, and Sheriff Bill Masters, who dealt with the case, does not support the version of Sam. "I have no doubt that it had killed Frank Marquis accomplices and he did not have" - ​​he says.

In general, it was recognized that Joe has no relation to the murder, but he was found guilty on charges of additional shares: not allowing the plaintiffs to gain control of the company, considered the court, he violated fiduciary responsibilities. nearly $ 1.5 billion, plus he had to pay $ 70 million in fines in 1994, it damages the plaintiffs were determined in size. "We were a little surprised by the decision of the court", - says Joe. A year later, the judge reduced the amount of compensation to $ 462 million, but agreed that the entire amount must be paid in cash.

To pay such a sum of money has been a daunting task. Five members of the Board who were responsible for the lawsuit, announced personal bankruptcy (sixth, the youngestFirst of blood brothers, Joe, Paul left the Council earlier, and a separate agreement was made against him). The parent company AMERCO, indemnify directors, assumed all obligations. Part of its assets have already been laid on loans, and many of the assets it had to sell.

His role in the story played by Mark closest to Joe's brother, who went into Amerco's board of directors in 1990 and was not responsible for the claim. He bought some of the assets, which are U-Haul was forced to sell. Under their pledge, he took the money in the debt and paid off their company. From 1994 to 2002, Amerco sold specially created structure SAC Holdings, the principal owner of which was Mark, 230 self-service warehouse for $ 600 million in cash and through debt. This gave her cash and the opportunity to receive the money for the management of this property. Today the brand has more than 400 stores, which controls the U-Haul. This property is valued at $ 3.3 billion, more than double the value of its stake (19.5%) the most U-Haul.

It was a reasonable financial maneuver, but how it was legal? The company had some workspine with financial authorities, it has greatly increased the debt and are having problems with the loans. And then there's Sean Paul filed a lawsuit suspected illegal financial transactions in the amount of $ 200 million. In June 2003, U-Haul filed for bankruptcy a year later revived. But the litigation continued until 2012. As a result, Paul was forced to sell its stake in the company and he was forbidden to hold its shares for 20 years.

It is difficult to manage the company's business, in which there are such upheavals, but Joe has to do it. Work has become an outlet for him. In 1987-1996 years he got rid of non-core businesses and much updated fleet, spending is $ 2.8 billion. He bought 80,000 new wagons, the average age of vehicle ownership fell from 11 to 5 years. He remained faithful to the road even in the most difficult times. As a teenager, he and his father flew in a Cessna 182 company units. Later, he took with him in such trips have their own sons, Sam and Stuart (both are working at U-Haul). "If not for that, we would rarely seen his father - says Stewart, executive vice president of U-Haul International. - Travel with attsom taught me everything I know. It was his passion. "

Today, Sean almost every second week spent in traveling, visiting dealerships U-Haul. Usually it takes off early in the morning on Monday and a week time to fly 17 states. To catch as much as possible, he flies on a corporate jet, but it is perhaps the only luxury he allows himself. He stops in economy hotel chains such as Red Roof Inn and La Quinta, in double rooms, eat mainly in the McDonald's. About love Joe to save the company tell legends. One day he came with four members of the evening at the motel. They booked three double rooms, but they did not have in stock, and they were offered five single rooms with king-size bed. Time has gone by midnight, however, Joe insisted to go to another motel.

"He has both feet on the ground. The only way he can understand, in fact things are going. He kept himself engaged in operations, learning, listening, watching, doing everything myself, "- says Bob Wasson, who has worked for many years the manager of U-Haul. In each division, he viewsie financial statements and asks employees what can be done to optimize the business. All offers enters into a tablet, then photographs these phone records and sends them to the assistant, which makes them the text - and then distribute it to managers as a guide to action. He also frequently visits the self-service stores - the business grows, its sales amounted to $ 211 million in 2015. U-Haul is not only manages the warehouse for the company SAC Holdings, belonging mainly to Mark, but she owns 799 warehouses in 50 states. They are often located in historical and famous buildings.

Business U-Haul - is mainly accounting and control. The company has about 1,600 units, but it still has 18,200 independent dealers who run self-service warehouses, gas stations, shops with them, repair shops and even hardware stores. Only in 2012 the company acquired a new partner in 2700, and it is not the franchisees and dealers that service vans and trailers U-Haul parking lots, decorate their rent for a commission of 21%. It is a relic of the long-standing relationship with LS ownersgas stations, stretching from the 1950s: dealers use the services affiliated with the U-Haul towing and repair companies that you can contact if something goes wrong with a van or trailer, rented out. Such companies around 15 000, and even in 2012 there were 2500. During this time, the number of employees (and those who work full-time and part-time) has increased by 7,700 people.

Today, the struggle with competitors have moved to the background. "A huge gap from our competitors, and the company can enjoy all the benefits of leadership - says analyst Jim Barrett of CL King & Associates, which is already nine years following the success of the company. - This is a sample of the company, which is focused on one thing, and for decades was successful in this regard. Today it is a real competitor - the consumer who borrowed the van from a neighbor, and he carries her things. " Sean is going to attract and these customers too. In 2010, he bought the company Collegeboxes, which was founded at Duke University, and is now based in Phoenix, - she specializes in the transportation of things a student Societylives. U-Haul also founded the Internet site movinghelp.com, where you can find people who will help with the move, and has developed a U-Box program, which allows the customer to order transportation of items in containers, if he himself does not want to deal with vehicle rental and driving.

Today, U-Haul good preconditions for further growth. But in order to lead the company in such a state, it took great human cost.

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Joe, for example, speaks today with only two out of all their brothers and sisters. But he did no regrets and does not intend to engage in the restoration of relations.

"I do not think it was a quarrel in the family has led the company to success. On the contrary, it could destroy it - says Joe, who is now married second marriage and has three young children. - I would prefer that we could do without quarrels, as a result, we have achieved, due to the fact that we have restored the ethics and values ​​that are laid my father yet. "