“The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who know not what they do.” (Warren Buffet, Berkshire Hathaway)
Those words appear on an easel in bold, black type in the sales office of Encore Wire Corporation, one of the largest employers and most successful companies in McKinney , Texas , a few miles north of Dallas . The quote - from Berkshire Hathaway's Warren Buffet - is a favorite of Vincent A. Rego, Chairman of the Board and Chief Executive Officer of Encore Wire Corporation.
 |
Vincent A. Rego, Chairman (left), and Daniel L. Jones, President, Encore Wire Corporation |
A dedicated and determined proponent of the market system, Mr. Rego leads his company by doing what he says he will do, listening to his employees and never asking his people to do anything he isn't willing to do (or hasn't done). He is, in short, a company man. He has achieved legendary status in the wire and cable industry.
At the age of 80, when a person finally chooses how to spend their days after a long and successful career, Mr. Rego has made his choice clear by continuing to spend 6 days a week at the plant. When asked how long he intended to continue leading the company he founded in 1989, he replied, “Until I die; what else would I do?”
“INC”, in cooperation with Ernst & Young and Merrill Lynch, named Mr. Rego “Entrepreneur of the Year” twice - in 1990 and 1992. Also, in 1990, Mr. Rego was the recipient of the Charles D. Scott Distinguished Career Award by the New England Wire & Cable Club. On the heels of those three personal awards, Encore and Rego once again made history, winning several National Electrical Contractors Association (NECA) Showstopper awards; and becoming the first ever electrical wire manufacturer to win the “Electrical Product of the Year” 2002 at the National Electric Show in New York City in June 2002. Both product awards were for Encore's introduction of colored wire and cable to residential and commercial industries. The McKinney Chamber of Commerce also named Encore Wire Corporation 2002 Business of the Year.
Born to first generation Portuguese-Americans, Rego had a work ethic from the beginning. He was born in Bristol , Rhode Island , on March 18, 1924 . He recalls well the lessons learned growing up in a smallish, Depression-era town. The difficult economic times of the Depression-era actually created an atmosphere that made for strong work ethic; “we knew that hard work was the only way to guarantee you were gonna have food on the table, and we never took that for granted,” recalls Rego.
“ Bristol was a town of about 16,000 people. We had several textile plants and a golf ball plant. The population was predominantly Italian and Portuguese, along with a sprinkling of blacks; and everyone knew everyone,” he recalls. “Everyone had porches, everyone kept an eye on everyone else's kids. Anything you did would be reported back to one's parents, so you had to be real careful because, in those days, Dad was boss. I mean, that's just the way it was,” he says.
Recalling his Catholic elementary school years, Rego said, “The nuns and the Priest, Father Lawrence Deary, were strict disciplinarians. If you got out of line, they had a three-cornered ruler, and they would rap you on the knuckles. That's the way it was back then; the big thing was, you didn't want them to report you to your folks, because what they did in school was nothing compared to what you would get when you got home,”
Rego graduated from High School in 1942. He was drafted almost immediately. “I volunteered to be a paratrooper, quite frankly, because I liked the odds better than
being an infantryman,” he admits. “I've always been afraid of heights, but when you get up there in the plane, they make you jump. I went to Fort Campbell , Kentucky , for basic, then to Fort Benning , Georgia .”
World War II swept him into a maelstrom which matured him quickly. As a member of the famed 101st Airborne he made jumps into Normandy , Holland and Bastogne. In the bitter winter of 1944, he and fellow paratroopers were trucked into the Belgian city of Bastogne to face what would later be called “The Battle of the Bulge,” the largest and last major German offensive of the war. More than a million men fought in that battle, which resulted 182,400 killed wounded or captured.
Rego graduated form Providence College with a bachelor's degree in chemistry, but decided he did not want to spend the rest of his life in a white lab coat. So he joined the family construction business. “One day, my dad came in and said, ‘Monday morning, you'd better find yourself another job.' I asked why. I was doing good back then, making $100-110 a week, which was big money.”
“He said, ‘I want you to get out and put your education to use.' Now you gotta remember that the Portuguese and Italians throughout the world wanted their kids to get an education, to have something better than they had. Even to this day, it's the same thing. So, I got a job as a lab technician for a buck an hour at Narragansett Wire in Pawtucket on May 8, 1950 . That's how it all started,” Rego says.
At Narragansett, Rego checked specifications on the various wire that was being produced in the plant, and he would go down into the plant to get the samples. “That exposed me to the manner in which the wire was being produced,” Rego recalls, “We would check for elongations, the cold-bend abilities, and the thickness of the insulation around the wire.”
During this time, Rego also attended classes managed by two chemists from Collyer Wire. “I worked for the chief chemist, Frank Gerardi. He showed me how to work the micrometers and the various lenses that you had to look through to determine how to move them around,” Rego recalls. “We had a big contract from the Signal Corps during the Korean War with very rigid specification. My principal job was to pass the specifications and get it out on time.”
 |
Rego throws the first pitch of the Encore-sponsored Mickey Mantle World Series of baseball, August 2002 |
In 1953 Narragansett decided to build a plant in Plano , Texas . “At that time, William Morley, the owner of Narragansett had a nephew and a son-in-law on the payroll and I felt that my opportunities there might limited. Besides, no one else wanted to make the move to Texas at the time, scorpions and snakes were what they all imagined.” “I felt the opportunities for me would be greater in Texas , and, lo and behold, I was right!” Rego says as he nods.
“There were phone calls and correspondence, but Mr. Morley waited until December to come down in person and check things out. On his way out, he said, ‘You asked to be the number one man at the plant. As of now, you are the plant manager.' Immediately after that he made me a vice-president, so things were coming my way,” Rego says. The Plano company, a subsidiary of Narragansett, was called Texas Wire and Cable.
Rego continued to rise in the company, and in 1957 Narragansett bought a plant in Orange , California by the name of Jordan Rogers. “The plant wasn't doing that well, and after we had it for awhile, it came under my jurisdiction in 1957 or 1958. I was then responsible for both plants. I would have to fly out there frequently,” he remembers. “It was seven days a week back then.”
The plant in California didn't produce as much wire as the one in Texas . “It was the time when hula-hoops became popular. We set up several machines at the Jordan Rogers and started making them. We were making more money on hula-hoops than we were making on wire. We were also making garden hose out of PVC scrap,” Rego says. The California operation was eventually sold; while fascinating things were going on in Plano at Texas Wire and Cable.
“The household building wire had been made originally with a cotton braid on it, and I still remember the fact that when you installed it, rats would chew on it, causing shorts. So we put an additive on that braid-rat poison-to prevent it. When we went to a fiberglass coating, we didn't need the additive, so we stopped using it.
But the real ‘breakthrough' came one day when a ‘junkie' got into the Plano plant. A ‘junkie' was a junk collector/seller.
My first question was, ‘How the heck did this guy get in here?' He wasn't supposed to be able to get past security. Well, I straightened that out and began talking to the guy. He was a junk man and had plastic sheets under his arms, shower curtains, briefcases, etc. and he wanted to know if we had any use for them. I asked him how much the scrap cost and if he could get more. The cost was about 4 cents a pound. That got me thinking that maybe we could chop the stuff up, melt it, and put it on an extruder to coat the wire, we could eliminate the fiberglass. Besides cost, the other problem with fiberglass was that we had to coat it with asphalt and then talc, so that it wouldn't stick to anything.
Plano then pioneered plastic-coated wire. “Underwriters' Laboratories did not have any specifications for the plastic because it had never been done,” Rego says. “I started buying that scrap by the truckload at four cents a pound, and it went over like hotcakes. I mean, it was the thing!”
“The problem was that scrap plastic came in all kinds of different colors. We used to add black to it, so all the wire was black, but some people started asking for white. We couldn't do that,” Rego says. “At any rate, Mr. Rosinald, the junk man, kept taking the prices up where it became prohibitive for us to stay competitive with other wire producers, even though we were the only company using plastic coating.“
“Along about that time, we were buying a lot of material from Diamond Shamrock in Houston . The salesman was in the plant one day and he mentioned something about ‘off-grade' resin. Now, resin at that time was very difficult to get. He told me there was an overflow area in Houston . The resin would end up wet and looked like a cranberry bog. Anyway, I went down there, and I asked how much that overflow was. We got it for practically nothing. I remember, to get the first load, I was down there with a shovel, loading this stuff into a truck, and we brought it back to Plano . We had to dry it. So, I conferred with my engineer, Phil Pringle, and he bought an oven. We successfully dried it, and it was a success. Resin was cheaper as an end result,” Rego remembers.
Narragansett made a decision to sell the Plano plant in 1963, and Rego quickly scrambled to see if he could put together a group of investors to buy the company. “There I was in Plano Bank and Trust, imploring the banker, Cam Dowell, for the money, (this was back when I smoked) I dropped my lit cigarette on the floor of his office. First it rolled under his desk, then under his chair. I dropped down on all fours, crawling around to retrieve it before it burned his carpet. I guess he appreciated my discomfort because I got the money.” He laughs, recalling the embarrassment.
“The firm was renamed Capital Wire and Cable because Capital Southwest put up the needed money as an investment. Plano Bank and Trust put up some of the money, but Capital Southwest was the major investor. They were just starting, and I think we were their first investment. Today, they're the largest small investment company in America ,” he says. 
So why, with the growth and performance of Capital Wire, would Rego sell the company? “Well, we got to the point where we were landlocked. We also had a lot of people who wanted to get out – to retire. U.S. Industries came to me and offered me stock to purchase the company. At the time, their stock was worth $32 a share. Ten years later, it was worth $2 a share. During that ten years, I worked for U.S. Industries, and, needless to say, it was different from what I was used to. They were on an acquiring binge, every time you picked up the Wall Street Journal, they had bought another company. I found that diversity frustrating. Find something you do better than anyone, and stick to it, this has always been my philosophy.” Eventually, U.S. Industries put the company back on the market.
“So, in 1978, I borrowed $22 million at four points over prime from John Wilson, executive vice-president of First National Bank of Dallas . Mr. Wilson is still on our Board of Directors today. Soon after, I told John I needed some relief from the interest (Jimmy Carter was President then), he agreed to cut it a little, and we sold off some excess land to pay down the debt, but we never lost a dime. We always made money,” he says proudly. In 1978, Rego took Capital Wire public, they sold 1,200,000 shares. In 1988, Rego sold the company again. The buyer this time was Penn Central, parent company of General Cable. They paid $13.75 a share – CASH!
“I got my check for the stock I owned, and, as I recall, it was $15,000,461. That same day General Cable's president, Gene Tonkavich, came into my office and said, ‘We already have a president, and we need this office.' As I remember it, I said ‘You know titles don't mean anything,'” he remembers. “At that point, my assistant, Shirley Wright, and several others got antsy about what might happen. My first inclination was to tell them how I really felt, but I kept my mouth shut.”
“He said they wanted to keep me on as a consultant. It was too little money for my ‘expertise', but that didn't matter. Because of my people still there, I said, ‘Okay, I'll stick around.' At our first meeting, he asked my opinion about something. I said ‘I would do so and so.' He said it wouldn't work. Two minutes later he asked my opinion again. I said ‘I would do such and such.' Again, he said it wouldn't work. I never expressed another opinion after that. But I wasn't going to stay and take money I wasn't earning, so I started looking. And that's when I found this place in McKinney ,” he says.
It was twelve fenced acres and a rundown 68,000 square foot building. It had a truck well and a shipping dock, and it fit. We could use the land and the original building to begin a new wire company. The unemployment rate in McKinney at the time was 15%, so that made sense. I made a great deal for somewhere in the neighborhood of $4 or $5 million,” Rego recalls.
Rego was sixty-five years old – an age when his counterparts were happily retiring and taking leisure quite seriously. But he wasn't ready. “I didn't need any more money. I love what I'm doing, and I'm good at it, even if that sounds a little immodest. I will retire when they bury me.” Rego's enthusiasm for the wire business is contagious, even to the uninitiated, about how it all begins with raw materials and how it comes from copper ore in the mines to finished building wire.
“When we got started, the first thing we were greeted with was a lawyer, stating that we were infringing on Southwire's patents. I had written some information on what we were doing out here – building the company – and Southwire felt that it was infringing on some of their process manuals. Southwire was one of our biggest competitors. I have no idea what they were protesting; they were just quick with the lawyers. In fact, they had filed against us before on patent infringement at Capital regarding aluminum alloy. They lost that one, too. I still carry the highest regard for Southwire as a company, in fact we purchased our continuous cast copper rod mill from them in 1997; they make one heck of a rod mill,” Rego says. “Anyway, we let their lawyers look around the plant and they determined that we were not infringing. So we got started.”
He hired Daniel Jones in 1989. “He worked for me at |
At 80 years old, Rego still packs a powerful golf swing |
One of many innovations that began at Encore is in packaging of residential wire (NM-B). “Ralph Skalleberg from Skaltek in Sweden popped in offering a different method of packaging wire; in fact, they had been in here recently discussing new methodologies. We had been shipping residential wire coiled, in cardboard cartons like everyone else at the time. This guy comes in with a shrink-wrap machine. We checked it out and figured it would save us a lot of money by simply eliminating the cost of the cardboard cartons. It also takes a lot less space to carry inventory and creates less waste. It was good for us and our customers.”
“Just coincidentally, we had just recently bought some new packaging machines – and they aren't cheap - and we felt that if the plastic wrap took over like we thought it would, those machines would become obsolete. So we returned them to the manufacturer, who sold them to someone else, and got all of our money back,” he remembers.
Encore customers purchased both residential and commercial building wire. “In this business, if you are a short-line producer, your growth is limited. You are not going anywhere,” Rego insists. “The people you are selling buy many types of wire … you must carry what they need. I wanted to put in a second plant. I had a little resistance on the board because it was going to cost $15 million. I'm also not big on accumulating debt. I thought we could arrange it with a secondary stock offering, which is what we did. We raised the $15 million to pay for it,” he says.
“Afterwards, we became a full-line producer with commercial wire, color-coded wire, and everything else. We now stock coax, telephone wire, portable cord, service entrance cable, tray cable, etc. We wouldn't have the business we have today without that complete inventory. It's just that simple.”
But the biggest contribution Encore makes to the industry and a major key to its success is color-coded wire and its enormous inventory. “We offer true colors on all large cables,” Rego explains, “and no one else does it to the extent that Encore does. We have invested a great deal of money in our inventory making sure that we have all colors, all sizes, in stock at any given time. On the job-site, it's a safety issue for the electricians in the field and from a business standpoint it's a key to time-saving reduction in labor costs. In short, it's a no-brainer. I received a letter from OSHA recognizing the contribution that colors can make to job-site safety; I'm still baffled by the fact that some in the industry fail to recognize it. Using black cables alone means that the phases are identified with colored tape, with a chance for the wrong colored tape to be put on the wrong conductor.
Mr. Rego's employees clearly adore and respect him. His door is always open, and he takes phone calls almost immediately. He sends hand-signed birthday cards to everyone on the payroll. He calls buyers and contractors, as well as corporate customer VIPs. “Anyone who does business with Encore can expect to hear from me directly,” he says. I want to know what's going on in the field. Many employees have stock options in the company, according to Rego, “so they understand the importance of success for the shareholders.” Encore owns residential real estate in McKinney , near Encore, which the company then rents affordably to employees with families who need housing.
The company continues to grow in market share, but Rego is quick to point out that ‘aggressive selling' isn't how its achieved. “When people say ‘aggressive selling', to me that means you cut the price. Our bankers keep wondering how we are paying our debt down so aggressively and I tell them it's because of our performance. Why would we cut prices? We have the best people, products, service, fill-rates, and sales reps anywhere, Encore customers know that. Non-Encore customers think that the service they get is as good as it gets, they come to expect what they get from the other guys. Our customers place orders for wire that they need now, not next month.”
Mr. Rego is enormously proud of the top-to-bottom innovations Encore has brought to the industry; he regularly walks the plant, savoring the success, admiring the stacks and stacks of finished building wire in every conceivable color. “It's like having a fine meal: very, very satisfying,” he says, smiling broadly.
Asked if the name of the company, ‘Encore' Wire Corporation, reflects his career in the wire business, he grins and nods. “Yes, it was my wife's idea. She said: ‘Vince, you're doing it again. Why not call it your encore?'”
Encore Wire Corporation is a publicly traded corporation (NASDAQ: WIRE) ; manufacturing a broad range of electrical wire for interior wiring in homes, apartments, manufactured housing and commercial and industrial buildings.
Bill Kincaid is the Marketing Manager for Encore Wire Corporation.
Cheramy Rusbuldt has been a writer since childhood, former news editor of the McKinney Courier-Gazette and author of the biography ‘Wired for Success' (Brown Books Publishing Group; ã 2002).
