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148•


CandidConversation A very successful recovery (Continued from page 146.)


beneficial, and we believe this joint venture really broadens and com- pletes our portfolio. We want to be able to offer every possible solution a customer might need, so they can select the one that is right for their application. Our customers can be sure we will always provide them with the latest technology for every solution. MJM: What has been the re-


sponse from your customers? Rajendra: In two words — very


positive. Margoni: This joint venture re-


ally gives our customers an oppor- tunity to be a one-brand water heating solution provider. They are very excited that we are so commit- ted to the tankless business moving forward. MJM: Now, I’d like to ask you


some follow-up questions to the inter- view that Ajita was kind enough to give me last summer (see THE WHOLESALER, July 2010, page 130). Would you mind sharing an update on the recovery A. O. Smith has made since the devastating flooding hit the Nashville area and left the plant under 9 feet of water last May? Rajendra: Our recovery has gone


extremely well. All of our major processes are operating at even bet- ter than pre-flood levels. And our smaller processes are coming along better than we expected. We will be at pre-flood production levels by end of first quarter. MJM: How did this disaster af-


fect your employees? Rajendra: In those first days, we


didn’t know the extent of the dam- age and how long it would take us to come back. We initially told our employees we’d guarantee their paychecks for the following week. Then we amended that to say we would guarantee their paychecks for a month. We felt this was very im-


portant because the flood wasn’t just a plant disaster, it was a family emergency. We wanted to take away the uncertainty they were feeling about their future and paying their bills. Holding true to these values cost us millions of dollars, but to be honest with you, the conversation I had with my boss to get approval for this literally lasted about 30 sec- onds. He fully supported my desire to take care of our people. You have to keep in mind, this


flood didn’t just affect A. O. Smith. Many of our people suffered dam- age to either their own homes or the homes of close family members or friends. We wanted them to be able to deal with their own personal sit- uations — then we would move on as a company. About 25 of our employees lost


their homes. We started a fund through a local charity with a $100,000 contribution with instruc- tions that all disbursements from that fund were to be directed strictly


we amended that to say we would guarantee their paychecks


“We initially told our employees we’d guarantee their paychecks for the following week. Then


flood wasn’t just a plant disaster, it was a family emergency.”


for a month. We felt this was very important because the


to our employees. That fund col- lected a total of nearly $200,000 that went to these families to help them rebuild. Many of our cus- tomers and competitors contributed to the fund, and we sincerely thank them. MJM: Structurally, have your fa-


cilities all been cleaned up and ren- ovated? Rajendra: Our objective was to get everything running as quickly as


possible — but with no sacrifice to quality — to ensure that we would be able to take care of our cus- tomers. I’m proud to say we did not lose any customers during this process. That is a testimonial to our people on the floor, and to Jim [Margoni] and his sales team. They spent weeks in a little conference room, where they sat around a large table and worked the phones to keep our distributor and reps apprised of the situation. We got a lot of compliments from


people about how we handled things. We were very up front and honest, which helped us build cred- ibility early in the process. We had over 2,000 machines that


were submerged in dirty water for days. In most cases the electronics couldn’t be repaired. But our team was really focused on getting those production lines up and running, and we accomplished that. We had 800+ people working on cleanup; most of whom were specially trained for this type of event. MJM: Is there anything you


would like to say to your employees and customers who stuck by you through such a difficult time? Rajendra: Our employees are


awesome. So are our customers. They were very open and willing to work with us so we could all come


through this together. All of our dis- tributors really stepped up and worked with their branches to coor- dinate ordering, delivery, etc. Com- munication and planning was key. And there was a high level of trust — our customers trusted that we wouldn’t leave them hanging. MJM: Looking back, what did


that experience teach you? Margoni:We have awesome peo-


ple. It has really pulled our com- pany — and all of our divisions and brands — together. It has made us an even stronger company. Rajendra: We empowered our


people to make decisions in the best interest of our customers and they did an outstanding job. I was really impressed watching how our team worked together. Parker: If there was any question


in people’s minds about whether our philosophy was right, once we came through this, they realized it was. I think that across our business, people now are much more of one mind and one focus than ever before. Warren: Communication is key.


Everyone is very busy, and we are all being pulled in different directions. But open communication and doing what you say you are going to do helped us get through this. For more information, log on to www.hotwater.com.


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•THE WHOLESALER® — MARCH 2011


• Be sure to visit www.thewholesaler.com for web exclusive articles and videos! •


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