Volts wagging.

AuthorElliott, Frank
PositionDouglas Battery Manufacturing Co.

After 75 years, Douglas Battery hasn't run down. But to keep on going, it had to recharge itself.

When the top executives of Douglas Battery Manufacturing Co. gathered last February in a Winston-Salem hotel for a weekend retreat, you'd have thought the mood would be upbeat. They were coming off an amazing run. In a mature industry averaging 2% annual growth, the family business had averaged double-digit increases since 1990. Annual sales had doubled in six years, to more than $150 million, making it the nation's sixth-largest battery manufacturer.

There were other achievements: Douglas had been selected to supply original batteries for BMW's rakish Z-3 roadster being built in South Carolina. The International Organization for Standardization had awarded Douglas coveted ISO 9000 certification for quality in all facets of its business.

That told only half the story. Truth was, while the company was selling more batteries than ever, it was making less money. After more than seven decades of running a profitable company producing a quality product and good service, the equation had gone awry. In their helter-skelter bid for market share, salespeople were booking battery orders with hair-thin margins. The number of rejects coming off the production line was rising. The distribution system was straining to meet the higher volume. Sometimes deliveries were late. Or wrong.

The number crunchers could no longer tell President Tom Douglas exactly how much it cost - to the 12th decimal place to produce a battery. They could when he was in charge of costing products. Because it's a private company, analysts don't follow Douglas Battery closely, but some surmise that its soaring market share was creating problems, especially after it began letting senior executives go in the fall of 1995.

If management had any doubt that they were snowed under by success, the weather that February weekend brought the metaphor home: The worst ice storm in a generation hit, stranding executives downtown, while their families shivered in the dark without power. The course they charted that weekend - to stop growing and even retrench until they could get their house in order - goes against the mentality in many boardrooms. But it's the sort of contrarian attitude you might expect from this closely held and intensely private company.

Douglas Battery has always been something of a contradiction. It's a major player in the battery industry: The company's approximately 800 employees can churn out 17,600 automotive and marine batteries a day from factories in Winston-Salem and North Kansas City, Mo. That's 4.4 million a year. The company's reputation has led well-known manufacturers to install Douglas batteries as original equipment - not only BMW but Porsche and Hatteras Yachts, Ingersoll Rand in its compressors and Honda in its lawn and garden equipment. It makes industrial batteries the size of jeeps for mining operations as far away as Turkey. It was 33rd last year on the North Carolina 100, BUSINESS NORTH CAROLINA and Arthur Andersen's ranking of the state's largest private companies.

Yet Douglas Battery is relatively unknown in its home state, even in its hometown. The Douglases - at least, the older generation - like it that way. But there are times when its anonymity borders on the comic - such as when the Greater Winston-Salem Chamber of Commerce sent it a form letter meant for foreign-owned companies with fewer than 50 employees. A recent question about Douglas to a state...

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