Henry Gruchacz - First Days in the Outdoor Industry

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[This is a work in progress. It might stay as one story or turn into half a dozen.]

00:00 – Henry Intro Starts

00:30 – Digression into importance outdoor experience to getting hired, backpacking in the military, backpacking and the military, plus Pivetta Boots and George Rudolf

02:45 – Henry Intro Continues

10:35 Peter Langmaid – Tennis Shark

11:35 The Importance of Concrete Experience to Management and Planning plus Budgets and Timelines and Making It Up as We Go Along

15:55 Hap Klopp Visionary

17:50 Henry Intro Continues

21:10 Alvin Duskin Knits with Alvin Duskin, Jack Edelson, and Jerry Mander leading to Bellwether History and Bill Werlin. All this leading to some understanding about how domestic production can go sideways.

Transcript:

Henry Intro Starts

Kevin Smith:Yeah, that happened. [Kevin had been talking about his non-conventional path to being in charge of HR at The North Face. Henry had joked that he thought Kevin had gone to the University to get an HR degree.]

Henry Gruchacz: That was my modus operandi always through my career. You just….you had certain antecedences.

I was a carpenter and I built the Sierra Designs facility in Berkeley…so I got hired as their first Executive!

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Digression into importance outdoor experience to getting hired, backpacking in the military, backpacking and the military, plus Pivetta Boots and George Rudolf

Dan Castner: You know what is interesting is that if you had a degree, you weren’t going to get hired. You had to be a backpacker. And finally, after a while, they decided that maybe the accounting guys needed a degree. John McLaughlin(?).

Kevin: That's how I felt. Cause I'd done my…I'd done some very serious backpacking in Vietnam. I mean I was in the boonies for a year. I spent 10 months actually backpacking. I'll send you a picture of me with my backpack.

Al Tabor: Yea I'd like that.

[Henry: These are fantastic Dan. These are from the local market.]

Al: One thing I found out doing this project is that Mountaineering Corps in World War 2 is where the bulk of Berkeley and the Boulder people came from. And so that military experience was like original genesis of the…George Rudolf and…  

Dan: 10th Mountain.

Al: Yeah. [>add link]

Kevin: The Backpacks that we have…the backpacks we had were the most advanced at the time. They were synthetic fabric. They weren't cotton or what's that…canvas…they weren't canvas any more. They were light-weight, aluminum, you know the poncho liner we had was synthetic filled, very thin, very light…so all of that stuff.  It fit in my head you know and when I'd come back to work in the North Face it was great. I was like wow we are actually doing this!

Al: One of my favorite stories is what Phil Scott told me is that George Rudolf and crew used to sneak into Italy behind enemy lines about 30-40 miles to find boots in this village (Henry: Pivettas? Al: Yeah.) and so, you know, fast forward a decade and he starts DMC to import these boots. The reason why it’s called Donner Mountain Crop is because the Donner party had to eat their boots.

Kevin: Before they ate everybody else.

Al:  It’s one of my favorite stories. Anyway so that whole import thing came directly out of his  experience in World War 2.

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Henry Intro Continues

Ok. so you said you were the carpenter and you got hired to run the..

Henry: Well, I met Bob back in, I think, '64-'65. He was friends with Jeannie Nagy. And David Buschman lived with Jeannie Nagy. And I helped remodel David's...he had a 3 story house on Potrero Hill and I helped re-model that and we became good buddies. He and I would go skin-diving, we would go mushrooming, and just hung out at times. So when he invested into Bob [Swanson] and George [Marks] [Sierra Designs Founders], he was a passive investor basically. (I went to Europe in '67. I got a Sierra Designs poofy jacket, down jacket. They called it ‘pneumatique’ in Paris cause I visited David in Paris. David was living in Paris at the time.) And when I came back he had already made arrangements with Bob and George to move from Tewksbury in Point Richmond and he asked me if I wanted to take this job and I said, Hell, yeah!”

And we had a contractor Anton [Goyack] who was a Donald Drumpf type guy. Very very concerned about his image and he basically poured the floor.  The building on 4th and Addison was dirt floors. It was a paint factory…and Anton came in and poured the concrete for the floor and he did a couple of things to strengthen the building and then I took over and I did all of the remodeling. And then…

Al: The stairs up above. The big stairs up the…was it a divided store and factory from the beginning?

[We need a picture or two or three of this!!]

Henry: Yeah, I built all that and my wife put the leather top on the…you know…we had a big desk there and she did all the leather. I build all the shelving and we put the floor in. Put the redwood on the side. We got some redwood from a barn up in Sonoma and we did the chevron pattern.

That my take on it. We had an architect who drew it out but it was little bland so we added all these little…and Bob was into it. The only thing he wasn't into was spending about I think it was $3000 for the mural. You know we originally had the mural. What it was going to do was go over the top and have lights and everything and he didn't want to spend money on that and so our we concentrated on the inside and made it really nice.

When I finished they said…you know Beery, Beery’s Yachts down on. He was going to make  a chandover(??)  over in Sausalito. He used to come in and see in and he wanted me to do that project over in Sausalito. And Bob and George [Marks]…basically Bob said you know, your work is coming to an end. You want to come with us? We would hire you. You can take over production.

I was good at driving nails but I didn't know anything about production. Tell you what. Let me start by learning from the bottom up. So what I did was I took over the finish table and I fired a few guy who were not performing and then I moved… George wanted to do more of the design work and so I moved into cutting and I did the cutting.

What happens is that you get a real feeling for everything. You start you really understand and then you can make changes and that sort of thing. The fundamental things I said to Bob was that we need to have a basic inventory of fabrics because what you want to do is cut and sew and I don't have the goddamn fabrics here to cut. So I said this is what we are going to need. And I think it was something like $30,000 worth of basic materials that I wanted and so he said well you take over the fabric. It was buying. So I bought all the raw materials and I did all of the cutting.

I had a guy Robin Linnett who was from Berkeley. Robin was famous in that his name was on the High School track record. You know the bulletin board and things like that. He was a quarter miler and Robin was a very intellectual guy. He is a real cerebral. Good thinking guy. I got him to take over the [cutting]. We had Reba who was kind of overall but we needed her mostly for making samples and Robin started taking over feeding the…

Al: I think I got a picture of Robin right. Somebody confirm this is him.

[01 - Peter Langmaid, 10 - Robin Linnett plus 03 is Stanley Ho and 08 is Arela Beary. Could use a little help on the rest!]

Henry: Yes that's him.

Al: You see how good everybody's memory is about…  [link to photos. Ask for help]

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Peter Langmaid – Tennis Shark

Dan: Oh my Goodness! Langmaid. Which one is Peter Langmaid.

Henry: Here. That's Peter right?

Al: Yeah. Peter was kind of my mentor.

Dan: And he made it around in the industry.

Henry: Peter was a Northern California champion school boy tennis singles. He, you see the way he is? He used to smoke unfiltered cigarettes and he would be. He looked like a homeless person and he would go to the tennis court in San Francisco and they bet a lot…Mission High School tennis courts…and he would go there and he'd look like shit and he's slap a few balls and then he would start betting and the next thing you know…

[Laughing]

Kevin: And he survived?

Henry: They wanted to kill him.

The Importance of Concrete Experience to Management and Planning plus Budgets and Timelines and Making It Up as We Go Along

Dan: I would like to go back to something Henry said because I think this is essential. And I think there's a good reason…a good reason why Sierra Deign and North Face were successful is that we all came off the streets or out of the woods and the people there...eventually the sales and marketing people…they all went through the factory. All went through manufacturing. They understood what it took to get for fabric. All of those things.

So there was never the animosity that I felt later when I was in Chrome or with Timbuktu. Where you have a group of, I use the word kids, with toys and stuff. Great computers. Smart. But they would make demands that were like “can I get this in 3 days” when it would take 5 days just to get the fabric. So they just didn’t get that and there was this time lag.

At North Face what we did, we had a structured timeline. Hap Klopp did many things really great. But one of the things he did was to have a timeline and the budget. And he made us all stay within the budget. He made it fun to understand the budget and there’d be [] every month. And also that timeline. It wasn't just manufacturing, you know the handover from development to design to manufacturing. Accounting also had to have money to come up to buy the materials when the season hit.  So everybody's on a timeline and we lived by that timeline and that was amazing.

Every company after that, they didn't have a timeline. The budget was controlled by the owner. And because when you had the staff in charge of the budget and every month you had to go and report if it meets the guidelines, if you built the budget, it works really well. And that's what changed to me. I think that starting in manufacturing. I think that manufacturing…I am very biased because I've done it for 40 years…was the core to organization. And I just, I mean, in Sierra Designs the same thing. You all were manufacturing.

Al: Right. I started out throwing boxes around in the warehouse and then 10 years later, I’m  running the computer systems that automate the process I physically know how to do. So, I say there is like, sort of the sales, marketing people, then there is the people that understand it takes time to move matter through space. Seems like a simple realization but attitude…you know…fabric lead time doesn't give a shit about the attitude. But in sales, attitude can be huge.

Kevin: But you know, the zipper needs to get moved here and then it has to go here and then it has to here. But if you know, if you just kind of think above that and you don't realize that in the process, somebody's got to count it, somebody's got to get it, somebody's got to make sure it matches and somebody's insists. If you don't have that experience then you're always frustrated and angry.

Dan: And here's the genius of [???]. There was a time when Bruce Hamilton was running the manufacturing. Genius guy. Amazing guy. And so design…designers would be designers: “You know, I still don't know if that color is quite right. Let me just give you another sample. ” At one point Bruce came over to Jack [Gilbert, in charge of sales] and said, “You can't tweak it. This is where the timeline has started off. You can't tweak it cause you have to have the sales people who are out there, the reps are waiting for the delivery of the product. If you don't give it to us by this date right here…”

Kevin: It aint gonna happen.

Dan: It ain’t gonna happen by this date and Jack went over to design, looked at Mark [Erickson] and said, “OK, you got to hand over.”

Kevin: That's a good point. Bruce really…

Dan: He ran that hard. So if you had 15 new products, you don’t get all 15 on the last day. You get all within that 2 month period when you are developing. And that really changed the dynamics. That went from the angry reps to, “OK, this is working out.” But that’s a large demand. We had only 2 seasons: winter and summer. It was a huge demand, to get it all done. But that Bruce Hamilton and Jack Gilbert recognizing it. And it worked! That doesn't exist any more…timelines…

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Hap Klopp Visionary

Kevin: Let’s talk about Hap for a second. Hap to me is somebody…Hap and Bruce…and Mark. But Hap and Bruce were like so far in front of stuff that they allowed for... I mean, I was probably not a very sane person. I am not now but I was much less I mean in 1975 when I was applying for a job. You know I did have PTSD and I was angry and I was you know. I was pugnacious. But I also had a desire and I wanted...

Henry: He was Irish, too.

Kevin: I wanted to work and I needed a job. And I was going to work hard. And those guys recognized that stuff. Hap, in particular…Hap came from a pretty privileged background and for him to you know have Tom Mann or Mark who was in communications or Bruce who was kind of a fucking nutball too, you know allow these guys…and Dan and the rest of us, and me…to come in and make this stuff work. That to me is remarkable.

That's a vision that I certainly haven't had. I don't have that vision. I didn't have it then and I don't have it now. But to have the vision and say we are going to make this work somehow.

Dan: Well here's what his vision was. Hap's vision was some kind of uber-crazy… out there. But what happened was he had Mark, he has Bruce, he had Jack, who said, “Okay, Hap, move over here.” And then they made the vision a reality. Cause Hap's vision was like …it just wasn’t going to [].

A lot of leaders…I found that in a couple of companies were that leader was really a visionary but also wanted to control. Didn't know how to walk away and let…

Kevin: He can't translate it. He couldn't. To be a visionary you have to be able to. That's remarkable to find a vision that you can translate that vision…

Dan: then walk away…

Kevin: And let people do it.

Al: And let people do it.

Dan: Here's one thing that I wanted to discuss today.

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Henry Intro Continues

Al: I want to make sure. Henry. We got you to a certain point. So now you are at Sierra Designs and you're running most of the production process from buying fabric to`the end right. And then you ended up at North Face?

Henry: No what happened is that I got Bob to actually kind of give me an estimate of what we were going to do for this season and then I built my plans on that. Especially and I told him about the fabrics, you know, and this this was gonna happen. But he was not as intuitive as Hap Klopp and Jack Gilbert. He was very good and, also, was very in control but he didn't, he really had a problem with the cash flow and the, I mean, we were always borrowing you know…but in any case what we did is we grew and did well.

During that period Doug Tompkins had…when I originally came there Doug was going through that bankruptcy and he was going to lost the North Face. So we went over and got all the stuff he had in the store. And Doug always had a warm spot for Bob and George and so he kept in touch. After he came back from Patagonia, he would come over and, you know, say hello and spend time. So I got to know him pretty well.

Basically when I left Sierra Designs, I went to Esprit and after Esprit, I ran another company in New York and then in LA and when I came back from LA, David had, David Buschman had bankrolled Walrus.

Al: I didn't know he bankrolled Walrus.

Henry: Yea. What he did was he bankrolled Walrus. He went to all his old investors from Sierra Designs days and got them to invest and of course we lost all of the money.

Al: I've had that experience.

Henry: We sold the bones to REI. And that's when I went to the North Face.

Al: Got it. OK.

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Alvin Duskin Knits with Alvin Duskin, Jack Edelson, and Jerry Mander, leading to Bellwether History and Bill Werlin

Henry: And I also ran, after North Face I went over and I ran the production at Bellwether. Did bicycle clothing and..

[Not sure what to edit out here. Probably most of the location stuff anyway]

Dan: Bill Werlin.

Henry: Bill Werlin! Yea he came in and destroyed the company! Laughing..

Dan: He is in Santa Barbara now.

Henry: Anyway, Werlin was hired by this Venture Capital company that bought out Bellwether.

Jack Edelson, he was the original contractor for 60-40 Parkas for Sierra Designs. He worked for Alvin Duskin…Alvin Duskin Knits and they were pretty far out. A real counter-culture type of organization. He had famous advertising man. I can't remember his name. He is in San Francisco.

[I've added a link or two or three about Duskin. Fascinating character.]

Kevin: Hal? Wasn't it the famous guy who did all of our advertising?

Henry: Yea he was a colleague of his. Anyway. Jerry Mander. Jerry Mander did the ads for Duskin Knits for which they took a whole page in the New York Times and they had this woman who was not a model in one of the knit dresses and they completely changed the whole concept of advertising clothing. They put a real person.

And Jack Edelson was the production manager. What happened is that Alvin sold the company to this guy in witness protection program. He eventually blew up on them. He was a real crook. But Al got out of the business.

Al was really a very seminal person, too, in the whole counter-culture thing. He ran a college down in Monterey back in early 60s. Yes, he was really something.

But anyway Al. When Alvin went out of business, Jack took space on Market Street, about 7th of Market in a loft and he took a lot of the girls from the Duskin Knits and he started Bellwether and Bellwether was a bicycle bag company and Jack got successful. He took on a partner Ed Dembowski who was basically a…he was a consultant, business consultant came in and told Jack how to run his business and Jack said well why don't you run it. I give you 50%.

When Jack got pancreatic cancer, he basically worked only for an hour or two a day and over at the North Face we were shutting down all of the domestic production. So Ed came over and said Jack wants you to take over his job which was in charge of production and so I was very comfortable about leaving when North Face came to an end. I went over to Bellwether and I ran the production there and I did all. I set all the piece rates and bought all the fabric and the.

That came to an end because Ed started to really get crazy. He was losing grip. And so what he did was that he sold out and Jack was still alive so Jack got the money just before died and of course his kids got it but he wanted to make Jack whole and in doing so he got this Venture Capital group who put this screws on them real tight and next thing I know Ed is out, Bill Werlin is in and the first thing Bill Werlin did was…. We had 2 seasons. We had summer and winter. Summer we made tons of gear you know. Shirts, shorts, all the stuff that flowed through real easy. All the over-locked stuff. We just pushed it through the machines. We were a 140% efficient in making summer.

In winter, it was the more complicated you know layered jackets, double thick pants and shit. We were making that stuff through. We would end up anywhere from 60 to 80% efficient on those and so we would make a tons of money because the volume in the spring was really good and the winter was very slow and we were not very efficient at it. So what Werlin did was he took the most efficient thing were the shorts. He took those into contract immediately and he took the shirts and all the stuff…and he left all the shit work.

Al: That was complicated and left it. Coz nobody wanted to do that probably.

Dan: That’s what happened in the industry because the easy stuff had volume. So you'd go to the contractor and I did that myself. And the hard stuff you keep in your factory cause no one is going to take 500 units of King Duts.[?]

Al: or 45 pieces for a uniform program

Dan: No one was going to do that. It just wasn't going to happen and so the first thing you took off when you felt you had…particularly if you were seasonal…you needed like 60 operators for this season instead of 30 so instead you just take off the 30 from the other season and then contract out for the volume. That wasn't unusual and it frustrating for a factory person like you and for me because then the efficiency is going all the way down and you're just going jeez you know. It was just...

Henry: Huh. Trying to push it through.. fuck.