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Tube & Pipe
Monday | 24 October, 2011 | 1:06 pm

Relationship-based business

By Lauren Duensing

American Tube Mfg. focuses on getting to know customers personally

October 2011 - “Without relationships, you have nothing in this industry,” says Rucker Durkee, president of American Tube Mfg. Inc., Birmingham, Ala., a fact he found out quickly when he started his tube company on a “leap of faith.”

Before jumping headfirst into the metals industry, Durkee was a stockbroker. “I didn’t like that, and I always wanted to have part ownership in my own business,” he says. While he was working in sales for a company that provided software to industrial manufacturers, he was offered an opportunity to enter the steel tubing industry.

“I had two small children at the time and was tired of being away from home,” he says. “I wanted to be in relationship selling for a commodity-based product with repetitive sales. The last thing I thought I wanted to do was start a business. But after a couple of years, I couldn’t find what I was looking for. I was introduced to a guy that had been in the tube business and was wanting to start his own tube mill. The parameters fit exactly what I was looking for.

“We talked for several months, and I didn’t take it too seriously,” he continues. “One day, this guy calls me to say he found a used tube mill for sale in Canada. He said, ‘It’s a great opportunity, a great buy, and if we let this go, it may be another year or two before anything like this comes up again.’ That’s how I got into tubing. I called him the next morning and said, ‘Buy it.’”

Durkee says the company wasn’t incorporated yet, but it had the pieces of a tube mill sitting on the back of a flatbed truck in the parking lot. In late spring of 1995, that mill was up and running.

Finding success
At the beginning, Durkee and his partner thought if they made a good product and offered it at a good price, it would sell. They quickly found out establishing relationships would be key to the company’s future growth and survival. “It was hard,” he says. “I was in the trenches, and it was just survival every day. When it comes down to survival, you do what you have to do.”

Durkee began making the rounds to sell tube. Along the way, he met Mike Jerina, who had a manufacturers rep agency in South Carolina, he says. “I didn’t know him, and he didn’t know me; we met in the lobby of O’Neal Steel. He said, ‘I want to be your sales rep.’ He had a fantastic reputation, which is what it is all about. You have to know people, and you have to be respected. He was the one that allowed American Tube to get on its feet and survive that startup period.”

Today, American Tube has found its niche, Durkee says, but it was “a grind” to get there. “Over blood, sweat and tears, we’ve grown to a good size with a good customer base. In the last few years, it has become a true joy; we have found our niche and direction,” he says.

Located in a 140,000-square-foot facility approximately 10 miles from downtown Birmingham, American Tube produces square and rectangular tubing for the automotive industry, packaging and conveyor systems, fencing and railing, among others.

“When we were just getting started, we had to learn from experimenting,” Durkee says. “We dabbled in all kinds of things until we realized we shouldn’t be doing them anymore. At the beginning, our limited range made it difficult for us to serve service centers. We added more range, but we still didn’t have the strong relationships, so we took the path of least resistance and went to the OEM market. It was competitive to sell to service centers, so we thought we’d sell to the end user. The other mills weren’t going there, and there was a reason they weren’t—because you’re selling [to] the service centers’ customers.”

In 2005, Rick Long joined the company’s sales force, bringing his knowledge of service center companies to the business. “Before I came along, American sold to a lot of OEMs and some service centers, and I told Rucker the best business is selling [to] service centers because they buy stock lengths. He liked that idea, so we got going.”

As a result, the company changed its model to focus on service centers. “It didn’t happen overnight,” Long says. “We had to earn some credibility back because service centers are not happy when they think you are selling [to] their customers. We had to earn their respect and prove that our intentions were right. Now we’re as conscious of it as anybody. We will not sell to an OEM unless it’s a true OEM that buys directly from the mill.”

Working together
Serving customers motivates all employees at American Tube, and as a result of scaling back in 2008, the company constantly focuses on running lean.

“We are not hierarchical; everybody just helps out,” Durkee says. “We have admin people that do sales, salespeople that do admin, inside sales doing billing and even operations guys going on sales calls.”

“We’re able to provide good service at a competitive price by keeping our overhead very low,” Long adds. “We all know how to do a little bit of everything. For example, our purchasing department consists of the president and the plant manager,” he says. “Because we have a small-enough group, we’re all in the trenches together. If someone is slacking, the peer pressure brings them back, and everybody pulls together.”

The employees are experienced, with many of them logging multiple decades in the tubing industry. This knowledge allows them to be confident in their decisions, further streamlining operations. Long cites American Tube’s plant manager as an example of the company’s flexibility. “Our plant manager is one of the greatest salesmen in the company,” he says. “If there’s a problem, he’ll go with one of the salespeople and he’ll help them fix it. If there’s a new size or gauge somebody needs, we’ll try to do it.”

In addition, “our receptionist knows every one of our customers’ names,” Long continues. “She knows their voices when they call, and she’ll ask about their kids or sick family members,” which provides true relationship building—getting to know the customer personally.

The employees’ motivation means American Tube continues to grow. Long says sales are on a steady upward trend despite the softness in the economy.

“We’re still the small guy,” Durkee says. “But everyone is motivated, and we have a fantastic group of people. Everyone is motivated by camaraderie, the customer and doing what’s right, and they’re proud of the job they’re doing. ” MM

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