Sunday, September 25, 2011

Marvin has a good business model

The maker of Marvin Windows, in this time of deep recession in the housing industry, has made cuts in a lot of things but not in their workforce.
Unlike so many other companies, Marvin Windows has neither laid off workers nor reduced health insurance benefits. And, its executives vow, it won’t.

Marvin Windows might seem like a footnote in the nation’s economic ledger. It employs roughly 4,300 people, about 2,000 of them here, and has annual sales somewhere from $500 million to $1 billion. But what this company is doing — and, more to the point, what it is not doing — is worth knowing.

Marvin Windows and Doors is a throwback to another era. For starters, it is a private company. No public stockholders are complaining that the latest numbers fell short, that the share price is down.

What’s more, Marvin takes an old-fashioned, even paternal view of its role here in Warroad, where the Marvin family has run things for just about as long as anyone can remember. The company has cut employees’ pay and reduced perks like tuition reimbursement and 401(k) matching. Employees haven’t received profit-sharing checks in two years, nor have the 16 members of the Marvin family who work for the company.

But, unlike its top competitors, Marvin has refused to fire people.
Not having to answer to the constant whining demands of the Wall St greed heads is a great load off their shoulders. Among onther things it lets them plan for the long term.
While Marvin’s story might seem quaint, even naïve, Ms. Marvin says the no-layoff policy is as much a business wager as an act of benevolence. She says she is confident that it will ultimately pay off. Already, she says, Marvin is gaining market share from weakened rivals.

Ms. Marvin acknowledges that her family’s private company may have more leeway than public counterparts. It has forgone profits for two years to keep everyone employed, for instance. Nonetheless, Ms. Marvin suggests that corporate America could learn a thing or two from Marvin’s approach and long-term outlook.

“You can’t cut your way to prosperity. You can’t grow if you are cutting your lifeblood — and that’s the skills and experience your work force delivers,” she says, adding later: “Today, I think, to a great a degree, I think things have gotten out of balance. We see Wall Street almost punish companies that take the long view.”
While many people may be horrified at the thought of reduced profits, the Marvins work where they eat and they are not about to shit on their friends and neighbors. Sounds like the Marvins are building more than a good window.

Comments:
Proud to have replaced all the windows but one in the house with Marvin windows. Good people.
 

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