Inside Amway: Van Andel And DeVos Family Ties
By Carol Cain
Senior Producer and Host
WWJ-TV CBS Detroit's "Michigan Matters"
ADA (WWJ-TV) - It's an American success story thanks to Chinese, Japanese, South Korean and Russian customers. In fact it's a worldwide love affair with their health and beauty products that put Amway on the map.
It's a long journey from the basements of pals Rich Devos and the late Jay Van Andel, who started Amway together 52 years ago by selling health supplements from their homes. Along the way the focus shifted from Michigan to the world's stage as 90 percent of Amway's business today comes from outside North America.
The direct selling giant offers health and beauty products, cosmetics, jewelry, air and water filters and even technology sold through distributors. Amway is owned by the DeVos and Van Andel families and was listed as the 32nd largest privately held company in the nation with 2010 sales of $9.2 billion, according to Forbes. The company has 14,000 employees globally with 4,000 in West Michigan.
It's full speed ahead these days as Steve Van Andel, 56-year-old eldest son of Jay, serves as chairman, and Doug DeVos, 47-year-old youngest son of Rich, as president. They run the company from the sprawling headquarters nestled here in west Michigan about 20 minutes from Grand Rapids. The senior DeVos, 85, serves on the company's board. He owns the NBA Orlando Magic with his family and writes inspirational books.
Family Ties
We spent time with Van Andel and Doug DeVos and got a look into the fast paced world of the sometimes controversial direct selling behemoth. Look at any list of wealthiest people in the nation and the DeVos and Van Andel families are typically on it.
Though worth billions, their Amway existence didn't' start that way. "We had the sales information in our basement and the product over in their basement," Van Andel said. "I remember going down our basement and my dad's secretary would make me a paper plane with a paper clip. It was the greatest plane ever," Van Andel recalled with a smile.
>> Watch the Michigan Matters special episode on Amway.
DeVos told similar homespun stories about growing up Amway. Both men worked in various areas of the company before assuming top posts – Van Andel as chairman in 1995 and DeVos as president in 2002. Van Andel is tall, 6"4", soft spoken and elegant. He prefers skiing and playing polo. It's not hard to imagine DeVos (who is 6"2") playing quarterback, which he did while attending Purdue University.
He is the more outgoing of the two, smiling often and interjecting to what Van Andel says. In discussing their game plan for the company, Van Andel explains after blazing a trail through 80 countries and territories there aren't many places left to conquer. That's why they are recalibrating and setting markers with renewed focus on North America and growing other markets they are already in, too.
Getting the Amway name out there is paramount, which is why they are reaching out to the Motor City, where the company just announced a blockbuster multi-million dollar sponsorship of NHL Detroit Red Wings owned by the Ilitch family. It includes the Amway name featured center ice at Joe Louis Arena.
Also, new tech products created by researchers at Amway's headquarters will make their debut on three vehicles at the upcoming North American International Auto Show in Detroit. "Their organization is a real asset for our state, continuing to grow and creating many new jobs," said Chris Ilitch, son of Mike and Marian Ilitch who serves as president and CEO of Ilitch Holdings. "Doug and Steve, the DeVos and VanAndel families, and their organization truly care about Michigan and committed to making it a better place for all."
Ilitch will introduce DeVos when he addresses the Detroit Economic Club in early December, just as DeVos introduced Ilitch when he took to the podium at the Economic Club of Grand Rapids in March. Because of profits from China and other lands Amway has continued to grow and philanthropy has been a priority.
Amway employees and distributors volunteered more than a million hours last year, according to the company's 2010 Amway Global Corporate Citizenship Report. One of its trademark efforts is the One By One Campaign for Children, which launched in 2003.
To date, the company has raised $141 million for children's causes that has helped eight million young people. "Whether it's creating innovative products to make someone's water more drinkable, mentoring an at-risk high school student, or simply turning the lights off to reduce our carbon footprint, we honor Amway's mission of helping people live better lives," said DeVos.
Philanthropy aside, it was business in China that gained much attention for the west Michigan firm, and not all of it was positive.
China Way
While GM, Ford, Chrysler and other firms expanded in China and other countries while they retrenched in North America, Amway did the same, but got caught in the storm over globalization.
Dick DeVos, eldest son who had served as CEO for 10 years, ran as the GOP candidate against incumbent Gov. Jennifer Granholm in the 2006 contest. The topic of Amway's global growth and jobs played out in ugly commercials that caught on as DeVos lost the contest.
In her memoir "A Governor's Story" Granholm and her husband, Dan Mulhern who co-wrote it, talk how DeVos might have been cast as a hero for saving the company by expanding globally.
Instead, she focused on 1,400 jobs shorn that allowed her to "paint the newest would-be hero (DeVos) as the villain." She said her campaign adopted the strategy of Sun Tzu's "Art of War." That "when your foot is on the throat of your enemy, press harder." It proved a bitter twist of fate as DeVos had indeed been the catalyst that steered Amway on its meteoric global path.
When he joined Amway in the 1980s, only 5 percent of its business was outside North America. But DeVos saw opportunity for American-made products around the world and led the international growth charge into Japan, South Korea and China --which remains its largest market with over 60 percent of sales.
Though the debate over China still rages, the facts speak for themselves. With one-fifth of the world's population – China is a huge force. "You can choose to see someone as a friend or a foe," Van Andel said about China. "If we hadn't reached out we'd be one-tenth of the size we are today." "There was a lot of misinformation about what we were doing," said Doug DeVos of the China bashing.
Amway continues to look to China for its future, which is why it just this week announced a new program called "Amway China 100,000 Strong Scholarship." In partnership with Michigan State University, it provides West Michigan college students the opportunity to study in China. The three-year program will be administered by Michigan State University's International Studies and Programs. The scholarships will be awarded to students of accredited four and two-year colleges in West Michigan.
"China is a key international partner, and enabling West Michigan students to live and study abroad there will improve our region's talent pool," said Dana Boals, vice president for Global Amway Brand.
Of Politics And Critics
In another bit of irony, Michigan Gov. Rick Snyder, who ran and won last year as a Republican candidate, just returned from his first trade mission where he visited Japan, South Korea and China. While Granholm refused to visit China, saying she would go only if there was a guarantee of jobs, Snyder made it a point to go there first. Democrats again tried to tag the China-as Boogeyman strategy to Snyder in last year's contest. But it did not catch on and he won over Democratic candidate and Lansing Mayor Virg Bernero.
Amway rolled out the red carpet for Snyder, who had never been to mainland China. "Amway is being a real standup player," Snyder told me. "I'm glad to be working with them as we build better ties with China." Indeed, any company with such incredible success is bound to have detractors -- Amway included. Add in court cases over its business practices (suggestion of pyramid schemes which has not been proven) and you're sure to hear some interesting dialogue.
Then there's the conservative GOP causes the families unapologetically supports. The Van Andel and DeVos families are longtime financial stewards of the Republican National Committee. "We know we have our critics," said Van Andel. "And Amway isn't for everybody," added DeVos, talking about its distributors."It's not their fault and it's not our fault. Everyone is not meant to be an entrepreneur."
Future Gardening
But entrepreneurship is where everyone agrees the future lies. With Snyder's goal of growing businesses, Amway and the two families behind it are in a league with a handful of others in the state – with names like Ilitch, Taubman, Meijer, Secchia, Gilbert and Karmanos might give them a run for the money. "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.
Speaking of the future, with executives like Snyder, Mitt Romney and Michael Bloomberg trading in corporate jobs for politics, one might wonder if Van Andel or Doug DeVos harbors any such notions. "I really enjoy what I am doing. Besides I am too old to go into politics," Van Andel said with a smile. "I had a front row seat and watched my brother. And I'm grateful he gave me that experience," Doug DeVos added with a laugh.
Carol Cain is the Emmy winning Senior Producer and Host WWJ-TV CBS Detroit's "Michigan Matters" show and also producer and host of CBS Detroit's "Eye On The Future" TV specials. Cain writes a column about politics and business in Sunday's Detroit Free Press. You can reach her at 248-355-7126 or via email.
