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Executive of the Year: Jack Fraser.

Executive of the Year: JACK FRASER

Jack Fraser's private office at Federal Industries is a sharp contrast to the frenetic activity downstairs in the Richardson Building where harried people dash here and there, gobbling down lunches and hastily reading notes for their next meeting on their way back from the last one.

His 24th-floor office is a breath of fresh air. Tastefully furnished with warm woods and off-white furniture, it's quiet and inviting. Like the man who inhabits the room, it exudes a charm and peacefulness that belies the pressures and stress of the job. With sunshine streaming in through ceiling-to-floor windows on two sides of the room and mirrors reflecting the welcome light it's almost as if the office is transformed into a cozy solarium. With just the right number of awards and artifacts displayed, there is no doubt that this is the office of a man with class and distinction.

Unobtrusively, Jack Fraser enters the room, impeccably dressed. With his good looks and easy manner, he fits right into the room.

Even with his humility and disarming humor, there is little doubt this man is a powerful corporate giant. As Chief Executive Officer of Federal Industries, Fraser manages a $1.9-billion-a-year company with 9,000 employees. He's held that position for 11 years.

Now 58, he has had the entrepreneurial spirit all his life. He grew up in Saskatoon where he graduated with a Bachelor of Commerce degree in 1952. Shortly thereafter, he went into the trucking business with a university buddy, Jim Howe, and before long, they had built Empire Freightways into the second largest trucking company in Saskatchewan. In 1960, the CNR bought the company; it was an event Fraser says he'll long remember. "It was the first trucking company the CNR ever bought," he says proudly. Fraser stayed on as president until he was 29 years old.

Having caught the "acquisition fever," Fraser and Howe took the proceeds from the sale and bought a petroleum distribution business. With Empire Oil, they acquired a chain of gas stations, bulk plants and fuel and oil distribution businesses which they sold to Gulf in 1963.

With money in his pocket and a burning ambition, Fraser and his family moved to Winnipeg where be bought the fashionable men's retail clothing store, Hanford Drewitt Ltd. In 1969, he got involved with Northwest Design and Fabrication Ltd., manufacturers of plastic products. It wasn't too successful at the time, but the company fortunes took a turn for the better when Fraser eased it into the manufacture of mobile homes which was a growing industry in western Canada. It became Norcom Homes Ltd. and through various acquisitions and plant construction, it grew to five locations in Alberta, Quebec and Ontario. "It was a volatile industry with many ups and downs," remembers Fraser.

The common thread that ran through all of Fraser's early business ventures was that each was having financial difficulties and needed improvement. It was becoming more and more apparent that Jack Fraser's talents lay in turning businesses around and making them profitable ventures. "It all happened initially by accident," he said, "but laterally by design."

In 1978, Federal Industries needed a president, and Fraser's name was on everyone's lips. "The Board was interested in me because, by coincidence, Federal's main business concerns were the same as I had been in - transportation, manufacturing and petroleum distribution," he says. "It was a marvellous fit. Federal was very diversified and I considered it a real opportunity because the company was relatively small with a sales volume of $125 million. Federal was having difficulties and the share holders were not happy with profits."

The marriage between Federal and Fraser was an instant success. "I felt that my entire business career up to that point had been pre-designed to prepare me for Federal Industries."

The first couple of years at Federal were a turnaround period and Fraser used a hands-on operational approach. "I was totally focused on short-term pressing problems. We rebuilt balance sheets and paid off bank loans. But the minute the business stabilized and the financial pressure was off, we went through a period of consolidation and planning. That was in 1980-82, and we spent time examining where we'd take Federal in the future. That heavy strategic planning stage focused on long-range goals."

During the last stage, Fraser assessed the strengths and weaknesses of the company and the turbulent times. "I felt that remaining diversified was in our best interests. I recognized that I had an ability to move from one industry to another."

Consequently, the decision was made to build a greater Canadian company from a Winnipeg base. But to remain diversified unique management skills were required, and under Fraser's leadership, Federal embarked upon the development of techniques and procedures for rapid growth. A plan was established that's still in effect today, and so far, Federal is ahead of schedule. "It's been extended to year 2000," says Fraser. "We made $48 million after taxes last year. It's been a good decade and even during the 1982-83 recession, we've never lost money."

In 1986, Federal acquired Canadian Corporate Management (CanCorp.) which in Fraser's mind was a landmark deal: "It was the first time we acquired a publicly traded company," he says. "Negotiations were fascinating because they involved all aspects of acquisition and take-overs. We paid $140 million beating out two or three bigger groups from Toronto. It was a key strategic acquisition because it gave us a solid base of business in Central Canada. It doubled our size that year."

As was the pattern in all of Fraser's acquisitions, CanCorp. was underachieving. Fraser reorganized it and disposed of businesses that were not performing. "I'm a strategic thinker," he says, "but I don't know whether I was born that way or I made myself into one."

If there is a relationship between Fraser's business acumen and heredity, he traces it to his upbringing in Saskatoon where he experienced life with the two major influences on his career - his mother and grandmother. "They were my inspirations. My grandmother was unbelievably powerful. She converted a huge old mansion into the largest boarding house in Saskatoon. Later she became self-sufficient by buying and selling houses. She was a wonderful, tough old woman and if I was born with business instincts, they came from her."

Wherever they come from, they definitely do exist. Fraser's exceptional organizational ability has allowed Federal to constantly adapt and move in the directions necessary to handle its rapid growth. He's an excellent communicator and motivates people easily, which is important in a business with 1,000 shareholders. He spends about 15 percent of his time dealing with analysts, bankers and institutional managers. "I've made 10,000 decisions and probably 5,000 mistakes, but I love business even if it's bad," he says with a laugh.

Fraser believes the key to his success lies in constant self-analysis. "I know my strengths and weaknesses and I hire around those weaknesses." Being an effective and easy delegator, Fraser has amassed a group of strong financial people.

"I've never been that good with figures. I love balance sheets but I can add two numbers three times and get three different answers," he says jokingly. "So, the most important thing I've done is assemble the team, develop it and be its leader."

Federal Industries is divided into four groups - Consumer, Industrial, Metals and Transport--with 26 divisions. As the patriarch of Manitoba's FIFTH largest business, his role changes every year. "It's constantly challenging and evolving. When I first began in 1978, I spent 80 percent of my time on operations and 20 percent on other components of the job. Now, I don't spent 10 percent of my time on operations."

Always mindful of growth and development, last year Fraser took on another challenge when Federal acquired Kingsway Inc. of Toronto, a major Canadian truck transportation and pool car company that did $320 million in sales. Combining it with Motorways now makes Federal the largest truck transportation company in Canada and the seventh largest in North America. The acquisition brings core strength in eastern Canada to the company's predominant western base. It also adds to pool car operations and increases penetration of the U.S., including intra-state trucking.

With all his wheeling and dealing, Fraser has built an excellent reputation within the business community. "Anyone who knows Jack Fraser has the utmost respect for him," says Kevin Kavanagh, president and chief executive officer of Manitoba's largest company The Great-West Life Assurance Company. "He's an astute student of business and anyone can learn from him just by observing how he approaches his business affairs or from conversations with him.

"A couple of years ago, I spent two-and-a half hours with him in a Toronto airport," recalls Kavanagh. "We talked about business concepts and for me it ended up in the nature of a helpful seminar. His enthusiasm for business is so strong that it makes teaching and sharing his experiences with others easy."

Because of Federal's global operations, Fraser spends an average of two days each week travelling. "I made about 62 plane trips last year." Although he spends a great deal of that time in Toronto, he resists the idea of moving Federal's headquarters out of Winnipeg.

From a purely shareholder profit point of view, he is convinced that Federal is not penalized by being located in Winnipeg. "If this was not the case I'd have to reconsider," he says. "Although only about two to three percent of business is done in Winnipeg, I don't feel this harms us in our opportunities to do business in Europe.

"I think it's terrible for Canadians to have such concentration of corporate and political power in one area. As a Westerner, I feel a certain responsibility to make sure that doesn't happen. It's important for the country to have head offices outside of Toronto."

Fraser also resents the parochial Ontario attitude that if a business is successful in Toronto, only then is it taken seriously, "When we bought CanCorp. from the Toronto establishment, they knew we were for real. It had a major impact on the stature and profile of the company," he says.

As long as Fraser is running Federal, the company will stay in Winnipeg. "Toronto's business community is so big and powerful and integrated and tightly knit that a person can get caught up in a herding instinct. CEO's see each other at various functions dozens of times each month. It's too narrow a viewpoint."

His support of Winnipeg has not gone unnoticed at the local level either: "Jack Fraser brings pride to Winnipeg," says R.E. (Michael) Hill, president of the Winnipeg Chamber of Commerce. "There are lots of high profile people but he's first among equals. Everything Federal Industries has done under his terrific leadership has been done with Winnipeg as headquarters. When I think of business in Winnipeg, I think of Jack Fraser. He's kept the faith with Winnipeg and proven almost single-handedly that we can be a headquarters city."

Fraser's commitment to his family is another important factor in his love for Winnipeg. Although he works a 75-hour week, he guards his family time fiercely. Sunday dinners, for example, are a tradition when the whole family gathers. Fraserhs eighty-two year old mother joins his wife and two children, and business is definitely put on hold. He has the ability to make a complete transition from work to pleasure, and this becomes an opportunity for him to charge his batteries and keep his priorities clear. In the summer, he tries to grab some Fridays and slip away for long weekends at the family cottage at Lake of the Woods where he enjoys the tranquility of the water, boating and reading. However, he is hopelessly addicted to business books of any kind. "Business is my hobby as well as my business," he admits.

Despite a hectic and sometimes frantic schedule, Fraser still finds time to involve himself in community work. He's a past president of the Manitoba Theatre Centre and former board member of the Winnipeg Symphony Orchestra. As well, he supports the Progressive Conservative Party and educational developments on many levels.

Seven years ago, Fraser spearheaded the Associates Program at the Faculty of Management at the University of Manitoba. "He saw the potential and singlehandedly rounded up over 200 businessmen from Manitoba, Canada and the U.S." says Kerry Hawkins, president and chief executive officer of Cargill Ltd. and chairman of the Associates Program at the Faculty of Management. "They support the Faculty through significant monetary contributions and provide advice and resources as well as act as a sounding board for the Dean.

"If not for Jack Fraser, there would be no Associates Program. As with anything that interests him, he gives 100 percent and is hands-on involved."

Throughout all the acquisitions, the growth and development, Fraser's goals haven't changed over the years. If anything, they've been refined. "Tactics change according to economic conditions and competition. I always challenge corporate assumptions, but I'm still comfortable with Federal's basic plan," he says.

As for any personal success, Fraser is a happy man. "The real satisfaction comes from the creativity. I've built an important commercial enterprise but I'm past a certain financial degree of success. Sure, I like being well-known and I enjoy the perks of office, but my satisfaction comes from accomplishing something and the recognition of that fact.

"If anything, I like to be known as an outstanding manager and strategist who plays hard but fair. There isn't enough money in the world for me to do something that's unethical, never mind illegal."

As head of Federal Industries, Fraser runs one of the fastest growing companies in Canada. "I can't believe all the attention and praise," he grins, "but my mother loves it. I'm just Jack Fraser from Saskatoon, doing what I've been doing all my life--running businesses."
COPYRIGHT 1989 Manitoba Business Ltd.
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Author:Rusen, Joan
Publication:Manitoba Business
Date:Apr 1, 1989
Words:2320
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