The ongoing construction of a $1.6-billion aluminum-rolling mill in Ashland, Kentucky, ticketed with the economic hopes and dreams of an entire region, is about as big and bold as an entrepreneur can go. But there are lessons for other business leaders in how Craig Bouchard, CEO of Braidy Industries, has approached his attempt to build his fourth billion-dollar company.
When Braidy opens its mill in 2020, it’s expected to employ about 600 people who’ve been plucked from a pool of more than 7,000 applicants for jobs that Bouchard says will pay between $50,000 and $70,000 a year. Another 150 jobs are supposed to materialize in an associated metal-alloy plant nearby. And in the meantime, Bouchard expects to employ about 1,600 people doing construction.
This would go a long way toward reversing the devastating economic slide of a part of Appalachia that has lost not only many coal-mining jobs, but also thousands of manufacturing positions in the last couple of decades. Bouchard also expects his investment to help solve a deep-seated plague of opioid addiction in eastern Kentucky.
“The opioid crisis matters a great deal to what we’re doing here,” he told Chief Executive. “We’re going to develop skilled labor that’s drug-free.”
While building America’s first new aluminum mill in 30 years may seem like the kind of high-stakes project that makes the effort unique, here are four lessons for other manufacturing CEOs from Bouchard’s ambitions:
Think big: After beginning his career as a derivatives trader, Bouchard built three billion-dollar companies and has won three highly visible hostile takeovers. But instead of counting his winnings and retreating to the sidelines, he has taken on his biggest challenge.
“This is going to be the first aluminum-rolling mill designed specifically for the auto industry,” he says. And Braidy added to its bet by acquiring Veloxint, an MIT-incubated company that develops and makes ultra-high-strength alloys of the kind that automakers increasingly are turning to, in their efforts to create “lightweight” vehicles. “It’s a dual sale for us to auto companies.”
Ask big: Bouchard considered 24 different sites and focused early on eastern Kentucky in part because Governor Matt Bevin was open to enticing Braidy with generous financial incentives. And during the final hours of Kentucky’s 2017 legislative session, lawmakers approved a $15-million package for Braidy.
“The governor asked me to go to Ashland and look for myself,” Bouchard recalls. Now, Kentucky is Braidy’s second-largest shareholder.
Not only that, but Bouchard went to the head of the state’s junior-college system and asked him to come up with specialized training specifically to help Braidy. Recently, about 140 of the mill’s earliest hires began instruction in materials science and metallurgy toward a two-year degree tied into the work at Braidy.
Tap into the military mind: Bouchard makes a point of noting that key members of Braidy’s management team bring the organizational skills, intelligence-gathering experience and orderly mindset of military veterans. Chief Operating Officer Blaine Holt, for example, is a retired brigadier general and 30-year veteran of the U.S. Air Force, and Curtis Carson, human-resources chief, is a retired colonel and former HR head for NATO.
Also, Braidy plans to tap military veterans for about one-third of the mill’s rank-and-file. “That’ll bring discipline into our workforce in a great way,” he says.
Wear your faith on your sleeve: Bouchard isn’t shy about saying that there will be a strong internal component of religious faith as he shapes the privately held company. That includes the offer of a Bible study for the college-degree candidates.
“We need to create a culture around Ashland that offsets 30 years of a negative environment,” Bouchard explains.
Value the right to work: Union activists in Missouri are celebrating the fact that voters (via a referendum) rejected a 2017 bill passed by the state legislature and signed by the governor to make the state yet another redoubt of the right to work. But Bouchard has made it clear that Kentucky wouldn’t have gotten the Braidy Industries mill if the state hadn’t passed and Bevin signed its own right-to-work legislation in January.
“There’s only one way to build a big business in these industries today, and it is greenfield,” Bouchard told the Wall Street Journal. “You have to start from scratch. No unions, therefore no pension legacies.”
Get lucky: When Bouchard formed the company in August 2016, there was no way he could have known that Donald Trump would be elected president three months later, and especially no way of presuming that as president he would make tariffs on imported aluminum one of the central planks of his trade policy. But soon after Trump imposed those levies in the spring, pre-sold order levels rose to 200 percent of Braidy’s expected output for the first seven years of production, from 140 percent before Trump’s move.
“All of the car companies now have signed up to become customers for us,” Bouchard says. “There was already a shortage of aluminum in North America.”