Vermeer: Building on a Legacy

By Year’s End, Jason Andringa will be the CEO of the Company His Grandfather Started in 1948.

2015 is a year of transition for Vermeer Corp. The third generation of Gary Vermeer’s family is taking the reins of the company he founded 67 years ago, leading it into a global construction industry that the founder could only dream of.

Jason Andringa — Gary’s grandson — has aspired to lead Vermeer Corp. from a young age. He has watched his family run the industrial and agricultural equipment company through good and hard times, taking in the lessons they have learned, as well as the innovative moves they have made to keep Vermeer at the top of the construction equipment industry.

His first job at Vermeer was as a teenager, stuffing envelopes. Today, the 39-year-old is the president and chief operating officer, transitioning to the role of president and CEO by year’s end. He has traveled the world during his Vermeer career, and sees the global horizon before him, excited for what it will bring. His mother, Mary Andringa, will step down from her position of CEO but will remain as chairman of the board for the next five years.

The Vermeer name is synonymous with the trenchless technology industry, specifically horizontal directional drilling (HDD). The company was one of the first to manufacture HDD rigs and today offers one of the broadest lines of HDD equipment. Through its four divisions, Vermeer employs more than 3,000 workers worldwide, with 2,400 at the Pella, Iowa, headquarters.

Gary Vermeer passed away at the age of 90 in 2009, remaining an active board member until his passing. He was all about finding a better way of doing things, making things more efficient and effective. Now it’s Andringa’s turn to build on that philosophy in the global marketplace he sees as so fruitful in the future plans of his grandfather’s company.

He understands and is humbled by the legacy Gary Vermeer carved out for his family. “I feel as though my entire life that I’ve been preparing to have the opportunity to lead Vermeer,” Jason Andringa says. “I feel very humbled, honored and grateful that our board is entrusting me with that opportunity. I think the world of Vermeer and have an incredible amount of pride in this company. My desire is to continue to help Vermeer do the best job we can in providing innovative products and solutions so our customers can be more productive and profitable in the work that they do.”

History Lesson

“My grandfather was a naturally and extremely inventive person who loved to work with machinery,” Jason Andringa says. “And those attributes, as well as his infectious curiosity, led to the creation of many pieces of equipment that remain at the foundation of Vermeer’s success today.”

The company has four product divisions: Forage, Environmental Solutions, Specialty Excavation and Underground, the latter includes its HDD and trencher product lines. For more than six decades, Vermeer has been making industrial and agricultural equipment that is built for working in the dirt. Gary Vermeer started his company in 1948 from his farm in Pella. Though a humble start, his company has grown into a global construction equipment leader.
During World War II when it was it difficult to find labor for his farm, Gary Vermeer developed a mechanical wagon hoist for his own use, allowing him to raise the wagon so the corn grain would spill out. His neighbors saw the homemade invention and wanted one, as well.

“My grandfather then started to build these mechanical wagon hoists for his neighbors and others,” Jason Andringa says. “And before long, there was enough demand so that in 1948, he incorporated the Vermeer Mfg. Co.”
Early on, he developed power take-off hammer mills to grind grain and later power take-off trenchers to till the fields. These product lines were built during the 1950s and were the genesis for the company’s underground division in later years.

The product that launched Vermeer’s first big growth wave was the development of the large, round hay baler in 1971— an idea sparked from a casual conversation Gary Vermeer had with a friend, who said it was back-breaking work to put up square hay bales for feeding cattle through the winter. It wasn’t long after Vermeer machines were making bales 7 ft in diameter and 6 ft wide, with the idea being to put up hay entirely from the tractor seat with no manual labor involved.

But it was the decades of the 1980s and 1990s that saw Vermeer enter an emerging construction arena that would impact the company like nothing before it: trenchless technology. The company got involved in the industry’s early years, becoming one of the first companies to develop the horizontal directional drilling rig — its Navigator series. This underground product line fueled the company’s second big wave of growth and to this day remains the company’s most important product group.

“One of my grandfather’s favorite quotes was, ‘There’s got to be a better way.’ My grandfather and the engineers at Vermeer knew right away that [horizontal directional drilling] was a fantastic way to install underground infrastructure,” Jason Andringa says.

Today, the Underground Division manufactures a full line of directional drills from compact to maxi size, built to install everything from fiber-optic lines to large-diameter pipelines. Vermeer also has a broad offering of drilling equipment from drill rods and piercing tools to vacuum excavators and mixing/reclaimer systems and tooling.
“Of our four divisions, [the Underground Division] is the biggest part of our business. It’s a little less than 50 percent of our overall company but it’s the biggest and most important product group within Vermeer,” Jason Andringa says.

Andringa’s History

In some ways, Jason Andringa has been preparing for the leadership role at his family’s company his entire life. Not that it was forced on him but it was something he felt at an early age. He remembers three specific jobs with his grandfather’s company. He earned his first Vermeer paycheck while still in junior high school, the result of him and his cousins stuffing thousands of envelopes for an event. His second job came as a result of working afternoons after school, cycle counting inventory for the Underground Division in Plant 7. He also served as his grandfather’s bush pilot, flying him to his summer cabin in Canada for five summers.

He originally planned on studying political science at Calvin College in Grand Rapids, Mich., but spending the summer before his freshman year with his grandfather building a cabin in Canada led him to pursue a degree in mechanical engineering. From there, he interned at the Johnson Space Center in Houston and later worked at NASA’s Jet Propulsion Lab (JPL) in California. He also earned his master’s degree in aerospace at MIT and, later, his MBA from USC, while working at JPL.

Jason Andringa has always had a love of flying, starting at a young age when his grandfather would fly his family to Canada for vacation. He started taking lessons at 15, soloed at 16 and earned his pilot’s license at 17. With such a passion for aviation, working at NASA was a perfect fit. The prospect of staying with NASA was intriguing but his strong passion for working for Vermeer was stronger.

“Growing up, I always anticipated that I would work at Vermeer. I believe I would have done something outside of Vermeer no matter what,” Jason Andringa says, referring to the company’s family employment policy that requires family members to work outside the company for three years before working at Vermeer.

Jason Andringa returned to Vermeer in 2005 and since then has embarked on a series of positions to prepare him for the eventual transition to becoming its president and CEO. His first position was an engineering role in the Environmental Segment, responsible for new markets. He served as president of the Forage and Environmental Solutions divisions, vice president of Dealer Distribution and Global Accounts and managing director for Europe, Middle East and Africa — the latter position relocated him and his family to the Netherlands for three years, an experience he describes as “invaluable.”

“That was just a phenomenal experience for both me and my family. I visited every single one of our dealerships in Europe, the Middle East and Africa. I was exposed to an incredible variety of cultures and ways of doing business,” Jason Andringa says.

That experience has also given him insight for where he sees the long-term future of Vermeer projecting — a global foothold on the trenchless market, as the need for replacement and new construction grows larger in those countries. He particularly points to Latin America, Africa and Southeast Asia. “There is an immense opportunity to install the type of infrastructure we have been enjoying in the United States for decades. We have an incredible opportunity to install that type of infrastructure using trenchless methods.”

Transition

The transfer of leadership will be completed by Oct. 31, the end of the fiscal year. Come Nov. 1, Jason Andringa assumes the positions of president and CEO and Mary Andringa will serve as chairman of the board for the next five years.

Today, the Andringas are jointly leading the senior leadership team at Vermeer. Mary Andringa has been with her father’s company since the late-1970s, serving in many roles over the years, starting out on the board. She was named president and COO in 1989, president and co-CEO in 2003, and president and sole CEO in 2009. She has been instrumental as her son begins the process of taking over the industry relationships that she has cultivated over the years.



Mary Andringa recently concluded her two-year term as chair of the National Association of Manufacturers, the nation’s largest manufacturing association, leading efforts to promote a stronger manufacturing industry. She is one of 18 private sector members of President Obama’s Export Council, where she represents manufacturing on important trade matters. She also served as a member of the Export Import Bank Advisory Committee.

Jason Andringa appreciates the training and guidance he has absorbed over the years from both his grandfather and mother, each offering different and unique qualities important in leading a global company. “From my grandfather, I was able to be around a person who is naturally curious and naturally innovative and naturally always looking for a better way to do something. It didn’t matter what it was, he was always looking for a better way than it is currently done,” he says. “From my mother, she has shown me her passion for the customers and her passion for lean and continuous improvement.”

Company Outlook

Vermeer has enjoyed tremendous success since its inception in 1948, most notable, through its internal research and development of products. Historically, the company did not pursue company acquisitions in order to expand its products; however, in recent years, a change in the leadership mindset has used a few acquisitions — particularly in its Underground Division — to increase its market share. In 2007, Vermeer acquired the operating assets of Horizontal Rig & Equipment for its three maxi rig models (500,000, 750,000 and 1 million lbs). In subsequent years, the purchase of used equipment supplier HDD Broker, as well as 25 percent of McLaughlin Mfg. (piercing tools and vacuum excavation units) followed.

“Historically, my grandfather was not a big advocate of acquisitions and Vermeer had very little acquisition history until about 10 years ago,” Jason Andringa says. “He believed that Vermeer could develop things better internally than to acquire externally. We continue to be dedicated to developing new machines and new products internally but there are circumstances in which we have decided where making an acquisition is more efficient and more effective than developing something internally.

“We have continuously improved our equipment; we have acquired new product lines, and developed internally new product lines. It’s really focused on what we can do to help our customers be most effective in their jobs.”
Like all manufacturing companies, Vermeer has endured economic ups and downs. The worldwide economy has suffered two major recessions in the last 15 years, forcing companies, including Vermeer, to make some hard decisions. Jason Andringa believes surviving those experiences has made Vermeer a better company.

“The two recessions we’ve had in the last 15 years have been the most challenging periods of the company’s entire history,” he says. “We went for 50 years without having economic challenges like what we faced in 2001, 2002, 2003, and 2004 and again in 2009. We learned a lot of lessons [from the first recession] that we implemented in 2009, making that second recession not as dramatically impactful for us as it could have been.”

Jason Andringa attributes the success during the 2009 recession to the company’s philosophy of striving to manufacture and conduct its business in the most lean and efficient way possible.

The outlook for the trenchless market is robust, in both the short- and long-term. Jason Andringa points to the oil and gas market for the larger rig work, noting its huge impact in recent years on the HDD market. “We’re hopeful that there is enough work out there that has been approved that it will continue to be positive for the next few years.

Then it will depend on the price of oil and gas,” he says.
As for the compact rig market, the opportunity is there, especially for the telecom and fiber-optic work. “There are a variety of opportunities that are going to be beneficial,” Jason Andringa says. “The installation of high-speed communications and desire to put more electrical infrastructure underground to avoid damage of storms are going to be important. There will be a lot of installation work for underground gas and water infrastructure, as well as rehab of sewers.”

He sums up his feelings about the company’s future this way: “I feel very fortunate to be able to step into the leadership of Vermeer,” he says. “My mom has done an excellent job of serving as the CEO. For myself personally, I am really interested in innovative products and with my engineering background, I do want to focus on the products we make. During my era of leadership, I hope that we will continue to become more and more of a global company and continue to serve customers outside the United States better.”

Sharon M. Bueno is managing editor of Trenchless Technology.