SELF-MADE MAN
By John Dunn
Employees at RL Hudson & Co. respect their boss so much they secretly nominated him for Tulsa’s Small Business Person of the Year in 2003.
Nobody but Rick Hudson, IM 67, was surprised that he won. “We did it behind his back,” says Chris Owen, director of marketing for the firm that designs, engineers and supplies custom-molded rubber and plastic components.
“He didn’t know about it until the week of the luncheon when it was going to be announced. We had to let him know so he would keep his schedule open that day,” Owen says. “We didn’t tell him he was going to win, we just told him he had to be there. He was actually rather surprised.”
The Metropolitan Tulsa Chamber of Commerce and the Small Business Administration sponsor the award presented to the owner of a company with less than 100 employees.
Hudson is “a remarkable person to work for,” says Owen, who has been with the company for seven years. “He’s an entrepreneur and a hard-driving, type-A guy, but he has a very compassionate side and he really cares about the people who work for him. Everybody who works here just loves him.”
The Tulsa award automatically made Hudson a candidate for statewide recognition and last April 1 he was named Oklahoma’s 2004 Small Business Person of the Year.
“The timing of the news gave me pause,” Hudson says. “It was April Fool’s Day, after all.”
Since 1980, when Hudson started as an independent distributor of seals and O-rings operating out of his Tulsa home, RL Hudson & Co. has become global, with locations in Arkansas, Ohio, South Carolina and Taiwan. The company designs and supplies products to some well-known brands and Fortune 500 companies, including Coleman, DitchWitch, Jacuzzi, Mercruiser, Poulan, Rubbermaid and WeedEater. Hudson has 80 employees and he says he tries to treat them well.
“We have beautiful offices,” Hudson says. “Everybody has their own individual office. We have a profit-sharing plan, we contribute to their 401k plan and we provide good health insurance.
“In all honesty, since the business has grown, I derive more pleasure seeing my employees have a nice life than I do in my personal comfort. A lot of my competitors have vacation homes and airplanes. I get my kicks out of seeing my employees send their kids to college.” Employee morale is high, Owen says.
“People don’t generally quit from here,” he says. “People sometimes get fired, but they don’t leave voluntarily very often.”
Hudson, 61, is founder, owner and chief executive officer of the company. Roger Stair, who has been with the organization for 17 years, is president.
Tulsa was once known as the oil capital of the world, and in 1980 and many oilfield equipment manufacturers were still located there, Hudson says. They started out as the company’s primary customer base.
“The business actually did fairly well the first year, we broke even,” he says. “Then in 1981 we made a profit and we’ve made a profit ever since.”
With the exception of the first year, the company has averaged 15 percent growth every year.
“We grew 36 percent in 2004,” Hudson says. “At our sales meeting in 2003, we predicted we would grow from $19 million to $22 million. We actually hit $25 million. In 2005, we’re projecting about $31 million.”
The company has just outgrown a new 36,000-square-foot building in Broken Arrow, one of Tulsa’s largest suburbs.
“We thought it would last us five years,” Hudson says. “It lasted us one year. We’re going to add another 70,000 square feet this year.”
A native of Chamblee, Georgia, Hudson grew up a Yellow Jackets fan, although his athletic ability as a football player earned him a scholarship to Vanderbilt University. “But they decided they didn’t need a skinny, slow, 160-pound end who couldn’t jump,” he says with a laugh. Hudson transferred to Georgia Tech.
After graduating from Tech, Hudson joined Parker Seals in Culver City, Calif. By the end of his first day on the job, Hudson knew where he wanted his career to go.
Hudson explains that after work he was taken to dinner with some of the company’s distributors who were in town. “They were all well-dressed and driving big cars and I said, ‘These are obviously the successful guys. This is what I want to be.’”
Hudson spent the next 13 years working toward that goal. After five years with Parker Seals, Hudson ventured into a partnership in San Francisco.
“I was a distributor, but I was a partner. I didn’t have full control and I didn’t like being in partnership,” Hudson says. He left for a job with a division of Disogrin called Freudenberg, the largest seal manufacturer in Europe, and stayed with them until founding RL Hudson & Co.
“I had to learn my business,” says Hudson, who became an expert on the properties and capabilities of synthetic rubber materials used in the sealing industry.
“When I started out I never thought that it would turn into what it has turned into. I had two young children and I was just hoping to make a good living.” He and his wife of 33 years, Diane, have two sons, Jason and Blake. Two years ago, Jason joined RL Hudson as a territory manager.
Hudson began his company in June 1980 and by August it was growing fast enough for him to lease a 2,500-square-foot building that had two offices and a warehouse.
But in 1982, Hudson says, “the oil industry went in the tank.” Oil manufacturers began closing and many of the ones that survived moved to Houston. Hudson liked Tulsa and decided to stay.
“We had to redefine our business or go outside of Oklahoma and we were primarily an Oklahoma-based company,” he says. The firm gradually expanded its territory into surrounding states.
The company’s major national expansion occurred in 1987. Hudson says a company salesman knowledgeable about the organization’s customers and operations left to start his own business in Tulsa.
“He went into competition with us,” Hudson says. “It made us go completely out of Oklahoma into areas like Chicago and Cleveland and the South. And that’s when our business really took off.”
Hudson’s aggressive sales ventures landed major accounts with Eaton Corp., Electrolux and Case/New Holland.
Five years ago Hudson observed that some of the large companies had begun to scale back their engineering departments. He decided to build up his department, which now has 10 engineers.
“We began positioning ourselves to fill the void left in those major corporations,” Hudson says. “I’ve spent a lot of money on technology. Our engineers have whatever they need.”
Hudson & Co. has the ability to perform elaborate CAD system designs and finite element analysis, allowing engineers to test models of component parts on a computer without having to create a prototype. “It gives us a pretty good idea of how a part will function in an application,” Hudson says. “Finite element analysis is something that many big companies don’t have.”
As a result, some major companies now turn to RL Hudson as their engineering arm, he says. “What this has done for us is we don’t have to compete for commodity products, we get in on the design stage. This allows us to get in on the ground floor on many projects.
“We’ve been positioning ourselves to become technically the best company of our kind available and that has opened up the markets for us. And business is really booming — manufacturing is booming,” Hudson says.
While the company designs and engineers component parts, it does not manufacture them. During the past 10 years, Hudson says, he has established business ties with five factories in Taiwan and China to manufacture products for the firm.
Hudson says the company has introduced American and Japanese quality systems to the Chinese factories, significantly improving quality production. “We have taught our factories how to do process controls, capability studies,” he says.
The company plans to enter into a partnership with a manufacturer in Guang Zhou, China, to supply products for some of its corporate customers that have moved operations to that country, he says. “Instead of buying it in China, bringing it over here and then sending it back to China, we have enough business that we can actually make the investment in rubber-molding equipment to make our first major step over there,” Hudson says. In the future, the company may establish a Hong Kong distribution center that will open the door to European markets.
RL Hudson has invested more than $1 million in equipment to inspect and verify product quality of incoming goods.
“You cannot inspect quality into a product,” Hudson says. “We test the parts and then we work with our suppliers in the early stages and correct the process so that the parts coming in are of high quality. We verify the materials. It’s reduced our defective parts coming out of Asia from almost 30 percent to less than 5 percent return goods. We have less than four-tenths of 1 percent return goods from our suppliers back to us. We have almost eliminated quality problems going out of here.
Hudson anticipates an obvious question: Why would someone want to buy from a company that buys products in China?
The answer to that is what he calls the "Hudson Advantage" : wide product range, engineering expertise, quality assurance, excellent supply chain management capabilities — 98.6 percent on-time delivery — and outstanding technical resources.
“Our O-ring design and materials guide is considered to be the best seal materials publication ever put on the market,” Hudson says. “We publish great technical materials.”
Hudson has surpassed his initial ambition to become a distributor. “We don’t consider ourselves a middleman or distributor. We consider ourselves to be a design firm and a supply chain management firm,” Hudson says.
Supply chain management is a top priority, he says. Oklahoma’s Small Business Person for the Year is not known for resting on his laurels. As far as customers are concerned, Hudson tells his staff, “You’re only as good as your last time at bat.”
