The Wiegel family’s innovative approach toward ownership and expansion has potentially positioned the company for the largest global growth opportunity in the company’s 75-year history.
In 1968, Martin Wiegel joined Wiegel Tool Works, eventually assuming leadership of the company 12 years later and ownership of the company in 1984. As with any business, Martin faced a variety of challenges throughout his years as CEO. However, his two largest challenges were not of his making and lacked true solutions. Between 1968 and 1984, Martin’s mother maintained ownership of the company from her condo in Florida and had the final word on spending decisions. When ownership was eventually transferred to Martin in 1993, Martin was required to pay a 55% inheritance tax. Both of these factors, although out of Martin’s control, decreased the company’s liquidity and severely handicapped Martin’s ability to reinvest and grow at the rate he knew was attainable.
Unbeknownst to his children, Martin made the decision in 1993 to forego even one dollar of his mother’s wealth and set up a family trust fund and a significant life insurance policy in order to generate the capital to pay off the inheritance tax. As a result, when Aaron and his two siblings assumed ownership in 2010, they were facing a significantly reduced tax burden. Without the debt burden, Aaron and his siblings hit the ground running, with funds from day one that could be reinvested back into the company. As Aaron described it, “My dad’s happiness was seeing his kids be successful, seeing the company grow, and seeing the employees that he considers family thrive. That’s what makes him happy. He’s a very simple man, and he lives a very simple life. That’s what I admire, and we really owe it all to him.”
Since 2010, Aaron Wiegel has invested 5%–10% of the company’s revenue back into technology, with a goal of maintaining a 15%–20% year-over-year growth rate. However, chances are that none of his decisions will have as significant an impact as his most recent. In May of this year, Wiegel Tool Works announced international joint ventures that will allow it to have a presence in South America and Europe, with plans to be in Mexico by 2022. The companies involved are exchanging technology, cross-training their employees, and approaching global expansion as collaborative partners. “I always felt with our company that we are a global supplier with a regional presence. In other words, we supply the world — just out of Chicago. Because we work with global companies, they really push us to go global with them because it’s important that we’re in their backyard. This joint venture will allow us to do that, but reduce our risk.”
When asked to offer advice to other companies that may be evaluating a similar collaboration, Aaron offered, “Forget the offer, the money. You’ve got to have the right partner. You have to feel comfortable that they’re aligned with you and your thinking, they’re aligned with your strategic goals, and you’re both comfortable enough to have the difficult conversations that leaders are going to have, and that you can work them through.”