Ray Finnie: Replacing a 'Legend' at Wescast.

How do you replace a legend?

If you are the 1950 New York Yankees and your Hall-of-Fame, world-beloved centerfielder Joe DiMaggio has retired, you find a kid named Mickey Mantle to insert into next season's lineup and don't miss a beat.

Similarly, if you are Wescast Industries, Inc., Brantford, Ontario, Canada, in 1998 and searching for a replacement for your Chairman and CEO Dick LeVan [who built the firm from casting sales of $25,000 (Canadian) in 1961 to $197.7 million in 1997, and took the firm public in 1994], you find a "kid" named Ray Finnie to take over the reins as president and CEO and don't miss a beat.

"We expected there would be disagreements initially between the two of them (LeVan and Finnie)," said Ruth McDonald, director of corporate development and investor relations and a 20-year employee of Wescast. "But it has been a smoother transition than anyone could have imagined."

This smooth transition has involved more than taking over a leadership role. Finnie is charged with maintaining the year-after-year growth in the exhaust manifold supply business that LeVan began. This growth encompasses increases in sales, market share (in the U.S., Europe and Asia), customers and capabilities (design, testing, machining and other value-added services) (see "Wescast's Next Chapter: Moving Beyond Borders, Manifolds," modern casting, August 2001). In addition, Finnie must lead Wescast's charge to stay in front of its customers and competition in determining what the future of the automobile exhaust system will be.

A Change in Leadership

Finnie arrived at Wescast in 1998 alter a 6-month search for a successor to LeVan (now Wescast's chairman). Fresh from a five-year stint as president and CEO of the Germany-headquartered automotive-supplier FAG Automotive, Inc., Finnie entered as a green sand rookie but a veteran in finance and the innerworkings of the automotive supply industry.

"We were looking for someone to take Wescast to another level," said LeVan.

At FAG, Finnie led a multinational organization and had developed relationships with automotive customers throughout the world. In addition, said Finnie, he learned the automotive "laws of the jungle," which are a necessity to survive at the upper echelon of global automotive supply.

Finnie said: "To excel in this jungle, you must have perfect quality, perfect delivery, an obsessive attitude toward cost reduction at a yearly average of 3-5%, and new technology development. Wescast must be obsessive about continuous improvement with a quality goal of zero defects per million."

Although Wescast already had dominated the exhaust manifold supply business in North America (and continues that role today with 52% market share), the firm was looking to expand business beyond its current borders. In terms of geography, it was looking toward Europe and Asia. In terms of markets, it was looking at the entire hot-end system of the engine and turbocharger housings. Wescast required a leader whose expertise aligned with this expansion.

"Although Ray didn't have the foundry experience, he had an appreciation for manufacturing and a tremendous drive to learn," said LeVan.

"Coming to Wescast was like coming home; it just fit," said Finnie.

Learning Wescast, HEART

During Finnie's first six months in office, he and LeVan were "joined at the hip." The goal was to ensure a smooth transition inside Wescast and for Wescast's customers and investors. Finnie and LeVan timelessly visited customers, suppliers and investment houses to "fill in (Finnie's) holes and weaknesses" and build the foundation he needed to lead Wescast. Wescast's status as a publicly-traded firm places almost as much importance on Finnie's ability to gain the confidence of investment houses as it does on his ability to gain the confidence of customers.

"Dick LeVan was and still is an invaluable resource for me," said Finnie. "He is a legend and one of the most successful automotive suppliers ever.

According to Finnie, one of his biggest stumbling blocks he had to overcome when he first joined Wescast was learning the differences in performance measurement at a foundry organization.

"In a foundry it is much more difficult to measure performance," said Finnie. "With FAG or even Wescast's machining, we could measure the efficiency of every manufacturing step--machine by machine and operation by operation. With the countless variables in every process used to produce a casting, it is more difficult to identify an issue as it arises during production."

According to LeVan, one of Finnie's greatest struggles was having to take the leadership position at a firm that is, for the most part, family-controlled.

"It is a tough position for someone to have to come into when there is so much history there," said LeVan.

Although he no longer is involved in the day to day operations of Wescast, LeVan's presence still is felt in the firm's participative management plan HEART (Helping Everyone Achieve Rewards Together), and his two sons and daughter are in key positions at the company. Initiated by LeVan in 1987 (see "Wescast: Leadership with HEART," modern casting, March 1998), this Scanlon Plan program is based in four principles--identity, participation, competence and equity--but is developed within the organization (no two Scanlon Plan programs are the same) as a means to achieve greater productivity and human fulfillment.

In the search for LeVan's successor, there may not have been a more important criteria than the individual's ability to understand, believe in and lead the HEART plan. In fact, said LeVan, Wescast used two psychologists (one was the firm's HEART consultant who serves on the board of directors) to help determine if Finnie would fit with the HEART mindset.

"Leading a participative management business is always about trying to find balance," said Finnie. "We insist that all of our employees actively participate in the business but the decisions are still made by management."

The fundamental theory to HEART is that if all Wescast employees are informed about how the business operates, they can better understand why the organization works as it does. The result is that employees are more able and willing to participate.

"It is a people system in which everyone contributes to success," said Finnie. "We have a process every year called alignment in which we identify where the company is going. We share the operating plan with all employees and then break down the top six objectives for the year into a critical few. These critical few form the basis for Wescast's continuous improvement plan for the year. This continuous improvement plan is rolled out and aligned throughout the organization so there is no confusion as to what our top priorities are."

Finnie states that as Wescast continues to grow, the challenge to find people willing to work within its culture also grows.

"It is a challenge to attract and grow people that fit our special culture," he said. "As we continue to grow, we must have leaders that accept our culture and are willing to help us grow it. To be competitive, Wescast must attract people like Microsoft does--the best and brightest--to develop the business."

A New Wescast

Under the leadership of Finnie, Wescast has grown sales to $401 million (Canadian) in 2000 on a 63% increase in manifold shipments (when compared to 1997) and increased North American market share in the automobile exhaust manifold arena to 52%. This has been accomplished, in part, due to an emphasis on becoming a full service supplier by providing manifold design, machining, testing and other value-added services.

"Our belief is that we should be leading the market instead of waiting until the market leads us," said Finnie. "Our job is to make the customer successful. Others go to customers with a defeatist attitude asking How are we going to cut our costs by 5%?' We go to them with solutions."

The drive to provide solutions has pushed Wescast to become more than just a "one-trick pony" in North American. In 2000, the foundry group began construction of its Hungary-based joint-venture Weslin Industries, which also will focus on Wescast's first non-manifold business in 15 years--turbochargers.

The foundry group also thinks magnesium and aluminum are material options it must consider to stay one step ahead of the competition. "We would prefer to stay in iron because that is where our expertise and core competency is," said Finnie. "But the growth in aluminum and magnesium can't be ignored. Weight reduction is a big issue to consider in the future."

Long-term, Finnie knows the importance of securing Wescast's future beyond the manifolds it is producing for today's internal combustion automobile engines. "We view fuel cells as an opportunity, but also a real threat to the internal combustion engine," said Finnie. "But if the changeover happens, it will be a transformation rather than a revolution. Hybrids and diesel engines will become more significant and then evolve into fuel cells. At this time, no one is supplying components for this technology and we can see the opportunities than might arise."

Replacing a legend, whether in baseball or the metalcasting industry, is as much about continuing the success you have inherited as it is about making your own mark. Based on the results of his first three years in office, Finnie has found a balance between these two and is leading Wescast's charge toward the future.

Raymond T. Finnie

President and CEO, Wescast Industries, Inc.

Age: 49.

Immediate Family: Wife-Roberta; Daughter-Elizabeth; Sons-Christopher and Michael.

Education: York Univ.-Honours Business Administration; Chartered Accountant, Ontario.

Company Information

Founded: 1902 (Western Foundry Co., Ltd.)

Metals Cast: Ductile iron and stainless steel.

Mold Processes: Green sand.

Core Processes: Coldbox.

Melt Processes: Coreless induction.

Products: Exhaust manifolds and related products.

2000 Sales: $401.3 million (Canadian).

Casting Facilities: Wingham Casting, Wingham, Ontario; Brantford Casting, Brantford, Ontario; North Huron Casting, Wingham, Ontario; Stratford Steel Div., Stratford, Ontario; and Weslin Autoipari; Oroszlany, Hungary.

Machining Facilities: Wingham Machining, Wingham, Ontario; Strathroy Machining, Strathroy, Ontario; United Machining, Sterling Heights, Michigan.

Total Employees: 2362.