Technology, innovation, equity driving progress at New Leader Manufacturing

As with all manufacturers, change has been the constant with New Leader Manufacturing. In the past two decades alone, the Cedar Rapids company has moved to a new facility, changed the company’s official name and expanded its operations into South America. Yet much remains the same for New Leader, company officials say – a family-owned, […]

As with all manufacturers, change has been the constant with New Leader Manufacturing. In the past two decades alone, the Cedar Rapids company has moved to a new facility, changed the company’s official name and expanded its operations into South America. Yet much remains the same for New Leader, company officials say – a family-owned, quality-focused operation driven to treat its workers fairly and with respect. New Leader CEO Rocki Shepard and president Jeremy Wild outlined the company’s past, present and future at the Rotary Club of Cedar Rapids’ Downtown Rotary meeting Jan. 20 at the DoubleTree by Hilton. Mr. Wild, who was named New Leader’s president in January, opened the presentation, noting that the company began operations as Highway Equipment Company in 1939. He said the New Leader moniker came from one of the company’s first products, a snowmobile introduced in 1940, which was used to pull a sleigh carrying people and provisions. The machine replaced a traditional sled dog team, thereby becoming the “New Leader.”

The company’s business, focused on manufacturing material spreaders for the agricultural and road treatment industries, has traditionally been split 50-50, with 50% of business on the New Leader side serving the ag market and 50% on the Highway Equipment side serving the municipal segment. Both the company’s New Leader and Highway Equipment products are V-style box applicators for the agricultural and municipal markets, distributing fertilizer and lime to farm fields and applying salt and sand to roadways. The year 2000 brought a “game changer,” Mr. Wild said, with the introduction of G4 technology patented in that year. The new system incorporated a variable rate dry nutrient applicator utilizing patented G4 spinner technology, which spreads materials on surfaces faster, wider and more consistently. “That opened up new OEM markets for us and allowed us to spread difficult materials accurately and to easily make adjustments on our application system,” he said. “It really kicked off significant growth for us in the North America and European markets.” Because of that growth, Mr. Wild said, New Leader moved to a new facility in 2002, and marked another milestone in 2019, rebranding the overall company from Highway Equipment to New Leader Manufacturing. “We changed the game once again,” Mr. Wild said.

Company builds on 84-year history

Ms. Shepard noted that Highway Equipment Company was founded in 1939 by Ray Gaddis, who sold it to Cliff Jordan in 1958. It was then sold in 1978 to her father, William T. Rissi, who had moved with his family to Cedar Rapids in 1975 to become vice president of operations, and Columbus “Cal” Basile, who agreed to become an investor. The two men co-owned the company together for 10 years until Mr. Rissi bought out Mr. Basile in 1989. Three years thereafter, Mr. Rissi died at the age of 56, and the company was put into a trust. Ms. Shepard and her brother, Matt Rissi, then purchased the majority shares from the trust, “and we've been running the company together ever since,” she said. As of 1991, Highway Equipment was an $11 million company with approximately 65 employees. Both Ms. Shepard and Mr. Rissi were in their 30s, both “somewhat inexperienced managers tasked with taking over the business after losing our father, who was definitely the patriarch,” Ms. Shepard said. At the time, there was a lot of competition from small to midsize privately-held manufacturers, Ms. Shepard said. Since then, most competitors have been bought up by private equity firms or large public conglomerates, “making New Leader one of the very few remaining family-held companies within our industries.” The company moved from its original “dark, dingy” and landlocked 7-acre facility at 616 D Ave. NW to its current 50-acre location at 1330 76th Avenue SW in 2002 – a fortuitous move, Ms. Shepard noted, since the 2008 flood wiped out the original facility.

Dramatic advances in workplace standards, policies

In terms of company culture, most of the company’s leaders were white men when Ms. Shepard started as plant manager in 1991. “I was the only female manager in the entire company,” she said. “Every single level of the company was white males. They were everywhere.” Many of the company’s employment practices were dated at that time, Ms. Shepard said. “We had inconsistent pay scales between men and women, and the women were treated as second-class citizens,” she said. “We had two female welders in the shop. And I remember at the time one of them asked a question and one of our managers walked up and said, ‘You don't talk to me. You are worthless, (and) I can replace you tomorrow.’ And I was just like, ‘wow, okay, so that's what we walked into.’” Changes came soon thereafter, Ms. Shepard said. “We created a system of accountability and respect for all employees, and we had consequences for harassment,” she said. “We did lose some employees that refused to treat people with respect.” The company also made safety a priority, Ms. Shepard noted, implementing lockout-tagout policies for equipment, becoming OSHA compliant and investing in newer, safer machinery. “We have a test facility for new product development that was added in 2018,” she said. “We have state-of-the-art manufacturing equipment which includes a fiber laser cutter and CNC equipment for hydraulic tube bending. I'm proud to say this past year we became ISO certified, and this year we're introducing robotic welding.” Hiring practices have also shifted over the years, Ms. Shepard said. “We started to try to train and hire women and people of color and people with disabilities,” she said. “We create a consistent pay grade system. No longer could you play favorites and pay people based on how much you liked them or didn't like them. Men and women now made the same pay for the same work. We began offering great health care benefits and incentive programs, profit sharing, and we make quality and service the cornerstone of our business.” Diversity and inclusion continue to be top priorities at New Leader, Ms. Shepard said. “24% of our workforce is now female, people of color or people with disabilities,” she noted. “31% of our management team is represented by females and people of color. And due to several record years of sales, we have significantly expanded our team, which now represents four generations.” While significant strides have been made, “manufacturing and agriculture are two industries that have a lot of work to do in terms of diversity and inclusion,” Ms. Shepard said. ”Neither sector has been heavily focused on attracting women, people of color or people with disabilities, and we're trying to change that,” she added. “We're working with local schools, community colleges, state agencies, and city leaders to promote manufacturing jobs that include women, people of color and people with disabilities. We want to try to remove as many barriers as possible to ensure our culture and workplace are welcoming and supportive to all those in the community.”

International branch now open, New Leader looks to the future

In 2018, New Leader launched its initial foray into South America, opening a 56,000-square-foot manufacturing facility in Assis, São Paulo, Brazil, a successful venture that has served as an extension of New Leader’s stateside operations. “We try to employ women, and we treat everyone with the utmost respect,” Ms. Shepard said. “Our expansion into Brazil has been a great learning experience for both our Iowa and Brazil team. We regularly have our Iowa members go to Brazil – I’m actually going there next week. We also bring our employees from Brazil to Iowa for four to six weeks at a time, where they can stay here, work here, experience the U.S. culture and get a better understanding of the company they work for. The average Brazilian makes about $8,000 U.S. a year, and there's just no way that regular working people in Brazil could ever get on a plane and come to the United States. So I can't tell you how much they absolutely love being here when they're here. It’s been a great, great program.” Like most manufacturers, New Leader has worked through “plenty of frustrations” in the current business environment, including the supply chain crisis and Iowa’s “brain drain.” “People seem to be moving away from Iowa, not to Iowa,” she said. “We have a labor shortage crisis, which has led to an interesting phenomenon. Today, being ghosted is a new reality. I can't tell you how many times we've extended a job offer (only) to be ghosted by the candidate. We've actually had new hires not show up on the first day. We get nothing – no calls, no emails.” All that said, New Leader’s future looks bright overall, Mr. Wild said. “We feel that Brazil is a market that can be the same size as our current Cedar Rapids operations, and potentially someday exceed it,” he said. “With our records of the past few years, we’ve been busy just trying to keep up with demand. We've added 50 employees in the past two years and significantly improved our capabilities. All the while we have been innovating and working on the future.” New Leader plans to introduce a new product this year, and another new product line is “in the works that will further diversify our business while playing to our core competencies," Mr. Wild said. Further, Mr. Wild said he’s optimistic about the future of manufacturing overall. “We see the future of manufacturing as something we want to foster for us and our communities,” he said. “The manufacturing culture is not the culture of days gone by, and it's certainly not what you walked into 30 years ago. We are working with high schools, community colleges and nonprofits, so that working in the trades is an option for our young people and seen as a viable career path … The future is bright at New Leader. We have a tremendous team, we have a great culture, we have state-of-the-art manufacturing and a solid product offering which creates a robust partnership with our customers and a place where our team can thrive.”