Amway Charts New Course
By Carol Cain
Senior Producer and Host
CBS 62's "Michigan Matters"
With record breaking 2011 sales topping $10.9 billion and double-digit growth in nine of its top 10 markets across the globe and an innovative manufacturing line that will produce its Nutrilite products gearing up, Amway is on a proverbial roll. And that's how Steve Van Andel, 56-year-old chairman of the Ada-based company, likes it.
He, along with Doug DeVos, 47, president, have steered the company started by their fathers 52 years ago (Rich DeVos is on the company's board while Jay Van Andel passed in 2004.) "My Dad and Rich started as entrepreneurs. I look at them as adventurers. One of the things Doug and I have tried to do is continue that spirit," said Van Andel. What started as a "soap company" has evolved into a health and beauty conglomerate with products sold in 80 markets.
Nestled in quiet western Michigan, its headquarters looks more fitting a backdrop for a Norman Rockwell painting than home of a conglomerate packing a punch across the globe. We spent time visiting with Van Andel and DeVos and got a rare peek into the fast paced world of the sometimes controversial direct selling giant. We also talked to Gov. Rick Snyder, MEDC CEO Mike Finney, Olympia Entertainment's Tom Wilson, Grand Rapids entrepreneur Rob Bliss, and others about the company's footprint on Michigan which is substantial.
Watch "Michigan Matters: A look inside Amway" at 11 a.m. Sunday on CBS 62.
Amway – whose parent company is Alticor -- was listed as the 32nd largest privately held firm in the U.S. according to Forbes magazine. The company sells cleaning products, Artistry cosmetics, air and water filters, Nutrilite and other items via direct selling channels. The company is owned by the DeVos and Van Andel families. Though worth billions, their Amway existence wasn't always champagne wishes and caviar dreams. "We had the sales information in our basement and the product over in their basement," Van Andel said of the early days when the company was run from the basements of their parent's homes.
DeVos told similar homespun stories about growing up Amway. Both worked in various aspects of the company before assuming top posts – Van Andel as chairman in 1995 and DeVos as president in 2002. Any company this successful is bound to have critics; Amway included. Add in some court cases over its business practices (suggestion of pyramid scheme which has not proven) and you're sure to hear interesting dialogue. "Amway isn't for everybody," DeVos said. "It's not their fault and it's not our fault. Everyone is not meant to be an entrepreneur."
Private Time Pays Off
Van Andel said being a privately held company has provided advantages. We have an opportunity to look at the long term and try things differently," he said. "We don't have to work on a quarter to quarter basis to keep everyone happy." It's a formula that's working as the firm posted double digit growth in nine of its 10 markets excluding Japan which suffered a devastating earthquake and tsunami last year. Amway is reaffirming its commitment to Michigan by transferring manufacturing jobs from a plant in California to Ada. The plant, which is expected to be fully operational by the second quarter of 2013, will have 53 employees.
Until a few years ago, Amway – like other major Michigan firms -- sometimes found it difficult to lure top talent from other markets. But things have changed. "I love West Michigan," said Lauren Walker, vice president of manufacturing at Amway who joined the company in 2008. She added it was a great place for families as she and her husband are raising their two teenage children there.
Keeping things close to home, Amway scored a goal when it signed on to be the presenting sponsor for the Detroit Red Wings – the first in the NHL franchise's history. "Sports is a great thing for someone in our business to be involved," said Van Andel. "We have a great connection with the Red Wings and the Ilitches (who own the Red Wings)." With its products found across much the globe, the pedal is set on growing market share in existing markets.
China Syndrome
China remains its biggest market and at times one of its biggest headaches. "You can choose to see someone as a friend or a foe," Van Andel said of China. "If we hadn't reached out we'd be one-tenth of the size we are today." Amway and China bashing became fashionable during the 2006 gubernatorial bid of Dick DeVos, big brother of Doug and former CEO of Amway, who ran against incumbent Jennifer Granholm. Amway's success became a political lightning rod that cost the election for DeVos and branded Amway for a time as sending jobs to China at the expense of Michigan jobs which wasn't true.
Amway had done what General Motors, Ford and other firms did in setting up operations in the communist country as required by the government there. "There was a lot of misinformation about what we were doing," Doug DeVos said of the China bashing.
Community Outreach
Amway remains a strong community player in markets where it operates. It's One On One global community campaign has helped 1.5 million children since 2003 with donations worth multi millions and 200,000 hours donated by employees in 2011. Blending politics and business is common with the two families, which is why it wasn't surprising Amway assisted Gov. Rick Snyder with his first trade mission to Japan, South Korea and China. "Amway is being a real standup player," Snyder said. "I'm glad to be working with them as we build better ties with China." With Snyder's goal of growing businesses here, Amway remains a rock star in a league where only a handful of other families play – names like Ilitch, Taubman, Meijer, Gilbert and Karmanos.
"We'd like to have more 'Amways' in our future," said Mike Finney, president and CEO of Michigan Economic Development Corporation, who is the state's jobs czar.
Carol Cain is the Emmy winning Senior Producer and Host of "Michigan Matters" airing 11 am Sundays on CBS 62. She writes about politics and business in Sunday's Detroit Free Press. She can be reached at clcain@cbs.com or 248-355-7126.
