Pat Whalen, the fourth generation of family behind Illinois-based Yetter Manufacturing, talks about overcoming challenges and embracing strengths as a shortline manufacturer through changing times. To do so, the family hasn’t always taken the most “traditional route” in product development, manufacturing or company leadership. Below is the full interview between Whalen and Farm Equipment editor Mike Lessiter.
Mike Lessiter: Tell me a little bit about yourself and what Yetter does here.
Pat Whalen: Well, I'm a third generation of the family. My grandparents started the company, I just started my 47th year with the company and I'm the general manager of the company.
Mike Lessiter: And your brother works alongside with you as well?
Pat Whalen: Yeah, there's four shareholders — my brother, my two daughters and myself.
Mike Lessiter: To encapsulate Yetter's place in the market, let's say you're on an elevator and going up to the top floor and someone asks, “what does Yetter company do?” How do you answer that question?
Pat Whalen: Basically our focus is on seedbed preparation and then any other parts of farming that go with that, like fertilizer placement, strip till and focusing on preparing the soils. That's our focus in the business.
Mike Lessiter: Tell me a little bit about how your grandparents got started in this whole endeavor.
Pat Whalen: Well, believe it or not, they started in 1930. You know, during the Great Depression and at the time the tractors had steel wheels on 'em and they were prone to plug up with mud and Harry Yetter, who was my grandfather, came up with a device that would scrape the mud off and his neighbor saw it, and it was just one of those things that mushroomed from his farm to other farms and he grew the business from that then.
Mike Lessiter: Tell me a little bit about what that problem was and how this solved it, what an impact it made at the time.
Pat Whalen: Well, if you didn't have a scraper on the wheel, it just packed up with mud and pretty soon you had no traction. What this device did, it scraped the mud off of it so you keep going in the conditions — like we would be this fall when it's extremely wet. Otherwise you'd have to stop and clean 'em off all the time. It was a time saver and it caught on and he grew the business from that and I've always... it was remarkable that it was in 1930, during the Depression when he was able to grow the business.
Mike Lessiter: He was a farmer I take it? Did he dream of getting into a manufacturing business?
Pat Whalen: No. It was just a second chance, like so many people that you read about that start up farming, solve the problem, the next thing you know there's demand for it and they're in business then. And one thing leads to the other. And that's, that's how he grew the business.
Mike Lessiter: So, he was able to scrape some dollars together for some manufacturing equipment and—
Pat Whalen: I've heard the history of — you know, the finite details about how they financed the business I'm not familiar with — but I know I believe some of his siblings helped finance it and then got enough money put together to start a small shop. I mean, it would be considered, at that time, a blacksmith shop basically. And then he grew from that facility to other facilities.
Mike Lessiter: Was that here in town?
Pat Whalen: Well, he started in Hancock County, which the county was to us and his original farm was probably about 15 miles from here and then I don't know why he picked Colchester, but he did.
Mike Lessiter: So, 1930 you got going with a blacksmith shop kinda specializing in this tractor scraper. What happened next from there?
Pat Whalen: They developed the company's… this'll be our 88th year. I mean, it's one of those things, it's a natural progression, you know? This product opened up the doors for other inventions or people brought him ideas and I know that scrapers were a big part of that for a number of years and then he expanded into grain elevators and then coulter devices he started back in the '30s and '40s — that's basically our claim to fame, the coulter business.
Mike Lessiter: What were Henry and Etta like, if you were telling your girls about what your grandparents were like as business people?
Pat Whalen: They were very down to earth people. I mean, obviously they came from humble beginnings and they never forgot that. And, it's kinda one of those things, I think they live the lifestyle that if you never get used to it, you'll never miss it and that's how they lived. Very personable and self-taught — you know, again going through what they went through in the 1930s to get to where they were at and, you know, the company fell on tough times in the 1960s and they worked their way through that and things started swinging back up again. They were able to make it through it.
Mike Lessiter: Yeah, what had gone on in the '60s?
Pat Whalen: There was a product that was produced, that was tested one way and it was changed and it was put back out in the field in production before it was tested like it should've been and it had mass failures so they bought it all back and, of course, that took their operating capital and then at the time obviously that spooks lenders and all the sudden their funding started to dry up for being able to go outsource money, or capital, and they were able to do it a little bit at a time, but it was enough to save the company at that time.
Mike Lessiter: Did you know that you were going to… was this part of your plan?
Pat Whalen: No, my desire was to be in commercial aviation. In fact, I went to school for that.And then I had set up to go to school three days a week and work for the company for two days a week and then after about a year I decided that I really liked what I was doing 'cause I was in sales and I got to meet a lot of people. That was more promising for me than flying an airplane. I went in and got my license, but I let 'em expire and don't... I still fly but I'm not pilot command.
Mike Lessiter: How many years, how long have you been here?
Pat Whalen: I just started my 47th. That's a long time. I was telling my daughters I was gonna do this interview and they said, “well, at least you've got enough time for 15 minutes, you know.” Over the time spread, but I start out usually being the youngest person in a room and today I'm the oldest. You know, so it's, it's just a flip flop kinda thing.
Mike Lessiter: How long has your brother been working here?
Pat Whalen: Probably 48 or 49 years. He's a couple years older than I am.
Mike Lessiter: How long did your grandfather serve as the owner, president of the company?
Pat Whalen: Until the early '70s, and then he had cancer and then my mother took over and then she passed away in 1980 and that's when my brother and I bought out the other shareholders.
Mike Lessiter: Your mother ran the company? Tell us about what she was like and what she did.
Pat Whalen: Well, her name was Joann and she was… my grandparents had two sons and a daughter and she ran the business for a number of years and she basically was also involved in the sales side of it 'cause she dealt with different customers around country. They had a very limited sales staff at that time, in fact when I started I was one of three people in sales and so it basically was... she did a lot of it herself and she managed the business from the manufacturing side of... they had a manager of manufacturing who reported to her, and all the aspects of the business she looked after it.
Mike Lessiter: So, that was probably pretty unique at that time for a woman to be—
Pat Whalen: It was. I mean, we were probably one of the very few people that had a mother working at that time. You know, the back of the '60s and '70s, then '80s.Talk about timing, that's about the time the big '80s downturn hit. That was quite an ugly affair. But we survived it. Don't know how, but we did.
Mike Lessiter: I was gonna ask you how you got through that time particularly as the new shareholders of a manufacturing company.
Pat Whalen: Well, ironically the lender that we'd used for years prior was in financial trouble 'cause a lot of banks were in trouble at the same time. We weren't aware of that, so they called our loan. So technically, uh, you might look on it and I really try to block these memories 'cause, you know, it was just one of those times that you don't wanna think about, but we were technically broke, we were just young and naïve and didn't know it. I mean we were going payroll to payroll to payroll. And then along came a company called ITT Financial that, which I don't even know if they're still in business today, but when every other bank was exiting Ag, they decided to jump in with both feet. Talk about bad timing. Well, for us it was our salvation, but many other companies failed. Without ITT, I don't know that we would be here today. That's how dire it was. And it's... not just here but a lot of places.
Mike Lessiter: Yeah, so just kinda kept going small bites to—
Pat Whalen: Yeah, I mean we did what we had to do. I mean, it's, you know, we were paying 25% operating loans, just to be able to get a loan was an accomplishment itself. We were doing business with M&W Gear Company which is now part of Alamo, and they sent in a consultant that they were familiar with the president of M&W at that time knew quite well and he gave us some tips on how to run a business, basically. And, you may wanna cut this out when I get done saying it but he said there's two kinds of S.O.B.'s in this world but he didn't say S.O.B., the acronym, he used the real term, he goes, there's a smart one who does all the right decisions, makes the tough decisions, stays in business but in the community you're an S.O.B., but you're a smart one then there's the other kind that's called a dumb one. Doesn't make the tough decisions, lets the business fail but in the community you're still a, a dumb S.O.B. Which one do you wanna be? Now I mean, we're sitting there, going… were you supposed to come here and help us, not put us down?
Mike Lessiter: Right.
Pat Whalen: We made a tough decision and we had to do things that we didn't wanna do, and it was very unpleasant and to this day, I mean, it helped save us ... save the business. I mean, we were able to still employ some people, not as many as we had employed, but we didn't fail. That I think, for a small, community meant a lot.
Mike Lessiter: Right, right. It still, still does — for this small community. I mean, having... don't make it through the '80s, you don't have what you have here today or… the two of you were, were young businessmen in 1980, just bought out the business, and had the market literally fall apart all around you.
Pat Whalen: Yeah, it just, like somebody flipped the switch. I mean, it wasn't, whether you agree with the guy or not, you know, Reagan was elected in 1980 and, and took office in '81 and have Paul Volcker who was the chairman of the Federal Reserve under Carter stay on with, with Reagan and they did things to stop this rampant inflation that we had. It was just total chaos and the thing that they used was interest rates and many, many families were affected, and I know farm families in this area that were very affluent, very successful, that lost everything. Cause they were over leverage during the hey days of the '70s when it was plant fence row to fence row went out and borrowed money, bought land that they couldn't really afford or shouldn't have bought at high prices and it came back to haunt 'em cause when they went to sell it, if you could get anybody to buy it, it was worth a fraction of what you paid for it. So it just cleaned their clocks. It's very unfortunate and it did the same thing to manufacturers, it did the same thing to implement dealers.
So it was a bleak time. We've not experienced anything like that since that. We survived all the other down turns in the markets over the years, but nothing's been like the '80s. Like what we're going through right now wouldn't even hold a light to it.
Mike Lessiter: Was there additional pressure on you and your brother in the 80s, knowing that you were caretaking stewards of your grandparent's company?
Pat Whalen: I'd have to say at that time we didn't look at it like we do today. Because again we were technically newbies at it and we had to cut our teeth and we were involved in so many other things that we probably just didn't have the time or perspective, but as you age and you mature then you start looking at things totally different.
Mike Lessiter: You had enough pressure in 1980 probably without having to think about that.
Pat Whalen: Many many sleepless nights.
Mike Lessiter: I know we've talked about the 80s quite a bit here, but I asked you about some of the successes. What are some of the hardest times?
Pat Whalen: Whenever you lay off staff, that's a hard time especially in small community because impacts a lot of families. And that's a very tough thing to do and we don't take it lightly. Our philosophy is that you got to look at from the perspective while you've laid other people off, you have other people still in their jobs and you gotta look at that, how we we're at least helping some. And unfortunately the lay off is part of the business, not one we have had to do very much, but we did do it in the past few years. Now we're trying to hire again. And we're on the opposite side, we're fighting with everybody else for what few people there are to hire.
Mike Lessiter: You and Bernie were young men — if you had been, let's say, taking that roll on five or ten years earlier, or five to ten years later as older executives, would you have had a different outlook on—
Pat Whalen: Absolutely. We would've done things a lot quicker, I mean obviously we'd have more time under our belts from a management standpoint and I wouldn't say that we could've predicted it was coming, but usually there's tell-tale signs something's about to happen. And you know, we just didn't read the tea leaves right — and not just us, but a lot of people didn't. That's what I say in the rooms when I'm at a meeting, you know, I'm certainly not the smartest person in the room 'cause I get some sharp people working here, all I do is bring the historical point of view to it and that's really all I offer.
Mike Lessiter: A perspective on it. But there's good lessons to share about those times even today, then to remind people things, right?
Pat Whalen: Well, I refrain from that because they mean something to me, but as an example, I mean I'm glad you brought that up, this happened yesterday. We have a young guy that's 26. Anyway, he does freelance social media work for us and I met with him and I brought out an advertising campaign that an ad agency had presented to us in October of 1991. He goes, that was two months before I was born. So we were just going back and looking at some historical stuff and I always thought they did some neat ideas, how do we put another twist on it to use in social media? I mean that puts it in perspective, you know? He wasn't even born yet.
Yeah. I bought a house for an expanding family in 1982 or 83 and I got a 13% fixed rate mortgage, I thought I got a hell of a deal. The only reason I got that deal, it was a repo. And the bank was wanting to get it off the papers so I qualified for that but interest rates on home loans, you know, were 16, 17, 18% was not unheard of. People complain about right now the interest rates are going back up to, what, 4 or 5% on homes?
Mike Lessiter: I was gonna ask you at another point in the interview who your mentors were.
Pat Whalen: Well we had, a board of directors made up of outside people that I think gave us a lot of insight. They were from very diverse backgrounds in their careers, you know, from an insurance agent, an attorney, manufacturing, financial… so they brought in a wealth of information for us and I think that's probably, from a mentoring standpoint, that's where we got it.
Mike Lessiter: That itself was probably pretty progressive thinking, to bring outside directors into the—
Pat Whalen: Right. And that was brought about by the lender, they insisted on it. They get outside help and basically, I wouldn't say these people volunteered for it, they were asked to serve on it, but it was basically volunteering their time.
Mike Lessiter: For our listeners, I'd like you to kinda describe what the manufacturing is that they would see — if you were walking them through, you know, the type and size and scope and all those things.
Pat Whalen: Well, to set the stage for that, one of the OEMs that we supply has a supplier development team and over the years we've used that team extensively. And one of the things that they insist on: “if you're good at it, invest in it, if you're not good at it, outsource it.” So in some manufacturing plants you'd go through, you'd see everything being done in turn one and we don't do that. We decided that we're good at punching, or like press work, high speed machining, welding, assembly, painting and then distribution. And a lot of items that fall in, in between that, like, we used to have three lasers going around the clock, we don't even own a laser today. I mean there's no need for us to own it because we can outsource it more economically than we can do it internal.
One thing that we've got going for us, you know, we're located in the center of manufacturing. You've got CAT 90 miles from us, Deere 90 miles from us, factories in St. Louis, so we're just surrounded by all kinds of manufacturing that outsource to suppliers the kinds of things that we outsource, like laser work. So, if you walk through our factories, you'd those things like laid out. You'd see the robots in welding, you'd see the high speed machining centers, presses and obviously we do powder coat paint, we do liquid, or wet paint, we then dip and then we do spray paint. Then we've got the distribution centers.
Mike Lessiter: So that was that, outsourcing your core competency discussion, was that something that came a long time ago in time or more recently?
Pat Whalen: It's probably been in the last 10 years that it's been a focal point for us with the supplier development and, at the same token, I mean they basically that OEM, um, they're very on the ball I mean they know exactly what our costs are. Cause I mean they're so diverse in what they do and they basically compare our costs to what they would get it for and obviously if we're competitive then we continue on, if we're not we gotta figure out what we're doing. And that's one of the things that I think over the time that we want from a competitive standpoint, they just keep you on your toes. And it's been a good relationship, we've been doing business with them for decades. But, I mean, they have a responsibility to their shareholders as we do. And if it's good for both parties we go on, if it's not they go their way, we go our way. But it's been a good for us because we've learned from it. There's two decisions they say business: one you earn from and one you learn from, you know. So we've done a lot of learning over the years.
Mike Lessiter: When did the OEM work, was that something that came in during the 1980's?
Pat Whalen: We did a joint marketing back in the 80's and then it developed into manufacturing for AGCO, Case and Deere. And I mean it's one of those things, it grew over the years. You know you build a relationship with people and I will have to say that was back in the day before you did build a relationship with engineering, you built a relationship with supply management. Today it's all mechanic, it's done electronically. A lot of cases you don't get the interactions with the people. And I think that sometimes that's by design, so that everything's done the right way versus sometimes bringing personalities into it. But it also impacts on the other end as well.
Mike Lessiter: What are some of those things that because of the big OEM work and the disciplines that have to accompany that have made the company better as a whole?
Pat Whalen: They make us open our eyes to look at things doing different things different ways. An example that to this day was an eye opener — they brought in some weldment and some parts and set them in the conference room and brought some of the players in. People off the floor and the management team and I sat in on it because I really couldn't give it any input. And they held up a small weldment and said “How many times was this touched, from the time it comes in the back of the where it's receiving as a raw material, to it goes out the other doors as a finished good?" And they wrote down all the numbers everybody gave ‘em around the wall. They had great big post it notes up on the walls. We didn't come close. I mean it was an eye opener that you know their attitude is, if you don't add value to it, why are you touching it? What can you do multiple stages? That was a real eye opener. And it was a real training I think. People walked out of there with a totally different perspective on how we need to look at things. Because we were terrible at it. Some we did okay, but some we were terrible at.
Mike Lessiter: So that's one of those exercises where they say, every time you're touching it you're putting 20 bucks onto this piece or?
Pat Whalen: This one person that was on the team came in and basically made people go through steps. Every time you took a step and he goes, “If you're not adding value” and the person like at the machining center over whatever he'd go "wasted step, wasted step, wasted step.” And you're thinking, well we're not juvenile, but he got his point across. You know, that's how you had to do it so that everybody understood. That we thought we were doing all the right things, but we had to cut steps out of it. And when we did, it's like a lot of manufacturers think — and not just manufacturers, a lot of people even in retail businesses — that you have to have this comfort inventory levels. So that you're not operating just in time. You may use a month's worth of inventory, but you're carrying two months worth of inventory. And we were guilty of that to some extent and this one supply management developer asked me one day we were walking through the factory and he saw this inventory and he goes “Don't you trust the bank?” And I said, “What do you mean do I trust the bank?” He goes, “You'd rather be able to see your money sitting on the floor versus seeing it in your bank account.”
You know you just, it stops you in your tracks and you're like well, that's a good point. You know you just get accustomed to how people do things and you think you're doing the right things, but sometimes it just takes somebody to come in and wake you up. Not only are we able to use that on the OEM side of it, but we're able to use it on the other side of it. For us there's a real benefit for it.
Mike Lessiter: So that example with the weldment, did you move to a cellular arrangement or?
Pat Whalen: Yeah.
Mike Lessiter: Buy castings or how did you?
Pat Whalen: Well um we did numerous steps obviously. Have you been in a Macomb factory? Well on the west end of that, where they do a lot of the assembly work, all those are cells now where we leave ‘em up all the time — where we used to tear ‘em down, set them up, tear them down. So we put in permanent cells. That made us much more efficient. Look at how where the machines were stationed. Relative to the you know different kind of jobs and we tried to sequence things so that somebody didn't have to walk five foot away they turn right into it. It's a lot of things like that and investment in machines that helped us.
Mike Lessiter: That's a good story. What are some of your proudest product innovations? If you went back and pulled out a handful and thought, this really made a mark in this industry?
Pat Whalen: I’d have to say, in recent years, the one that probably put us on the map was what we call the residue manager, which is commonly referred to in the industry as a row cleaner. And that was back in the early 90s and we had a local, at that time it would be called a big time operator, in this area and today they're super big time operators. But anyway, we were licensed to build a product and we took a couple of our samples out that we're prototyping to this farm in the spring and he goes, like I'm really busy right now, I'll let you put two rows on. If it works, then we'll talk about it. We put the two rows on, he made one around he goes, it was a 12 row planter, he goes, “how soon can I go to 10 rows?” Well luckily we had it with us just in case.
I mean, it was a type of farm on a grand scale at that time and like I said the farm is much bigger today and it's once we knew that he approved of it that he wasn't going to be the only person who would approve of it. So we expanded it and took it out to the other test sites and the rest is history. It just exploded over night.
Mike Lessiter: Do you have the biggest share of the market in that product that I see?
Pat Whalen: I would think that we do, yes. I mean, no one reports it, but assuming the people that we supply in the market share that we have on the Yetter side. I would have to think that we do. We never let our guard down thinking that, we're always trying to push harder to get more market share and new innovations and that to grow the market.
Mike Lessiter: Mm-hmm. So that's one. Are there are there couple others that—