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August 2014
Positive Technology

CEO Tom Duncan greets visitors to China-based Positec’s North American headquarters with a firm handshake and huge smile. Then, he ushers them over to a completely furnished workshop stretching the entire right wall of the reception area, complete with a huge workbench, drills, table saws, circular saws, replacement bits and blades, and more. He walks through the shop with a gleam in his eye; he says he gets to work his dream.

 

“Whether it’s an end user, a retail client, or a product developer, Positec is dedicated to providing a hands-on experience here at our Charlotte headquarters,” explains Duncan. “This workshop has been created so that we can not only test out our new products, but also provide our buyers with a totally immersive experience.”

 

Duncan laughs as he admits that he often feels like a kid in a toy store when new products arrive for testing in the workshop.

 

As is evident from the company’s name, short for Positive Technology, Positec’s entire approach to creating home improvement technology is one that centers on innovating for the customer. On display are many of the company’s products including a new battery powered string trimmer and a wheelbarrow that can transform into eight separate forms. One display shows off several of the company’s over 2,000 patents and Duncan says that another 2,000 are currently being processed.

 

Duncan cites the Worx TriVac patent as an example of the company’s innovative problem solving. The Worx TriVac is both a leaf blower and a vacuum, changing functions with the flip of a switch. Duncan describes how other leaf vacuums require a long, cumbersome barrel so that users can’t injure themselves by reaching into the vacuum.

 

Positec’s engineers decided to design a unit with a short barrel with a slight bend at the end to keep hands out of harm’s way, resulting in a blower/vacuum combo that is only slightly larger than a traditional hand vacuum.

 

“Because of one small, innovative change, the entire concept of a blower/vacuum combo has been turned on its head,” Duncan remarks, most satisfied.

 

Looking for a Start

 

After graduating from the University of Virginia in Charlottesville, Duncan describes his “first real job” with Lawler Ballard Advertising in Nashville, Tenn., where he wrote sales brochures and managed a few accounts.

 

“It was a great first business job. I’d compare it to the hub of a wheel—I dealt with different types of businesses. I’d visit a liqueur account in the morning and, while still in my suit, a dairy farm in the afternoon to learn about its forage grass for cows. The next day I’d visit a bank.

 

“I was hearing about the coming formation of the European Union, and that interested me,” Duncan continues. “I decided to get an M.B.A. in international business studies; I left my job and enrolled in the University of South Carolina (USC) Moore School of Business.

 

“As part of the program, I took an intensive German language course and then spent eight months in Germany as an intern at a packaging machinery company. Learning a language in school and then having to speak it in a business setting is one of the most humbling experiences you can have.”

 

“I’ve always had an international outlook when it comes to business. In fact, I think a lot of Positec’s success is due to that. I meet business owners all the time who are focused solely on their specific regions, and many are afraid to step out of their comfort zones,” he says. “I am completely comfortable in international communities. I enjoy the diversity, learning the culture…it’s all part of the fun.”

 

With his business degree in hand, Duncan went to work for Vermont American, a joint venture of Emerson Electric and Robert Bosch in 1992. “I was recruited because I knew German,” he says. “In 1998, I was promoted to vice president, and in 2000 Bosch bought Vermont American. He stayed on as vice president of international with the Accessory Business Unit of Robert Bosch Tool Group for a couple of years, but was intent on starting his own company.

 

“At that point, I wanted to do something entrepreneurial. So I left in 2003 and acquired the rights to use the Rockwell name for power tools. Rockwell International had sold premium-priced tools for professional tradesmen and serious do-it-yourselfers under the name until the early 1980s, but not since.

 

“I planned to reintroduce the brand with a new line of tools and sell them through stores like Sears, Lowe’s and Home Depot. So, I started looking for investors and a factory to make them.”

 

Making a Connection Abroad

 

“It was right about then, in 2004, that I met Don Gao in Shanghai.”

 

In the mid-1990s, Gao was a contract tool manufacturer with his own factory. He manufactured private-label hand tools for clients (as an OEM, original equipment manufacturer) such as Sears. He won a huge order for angle grinders from U.S. tool titan Black & Decker. In one year he shipped 700,000 of them, Then, Black & Decker cut its orders, deciding to make the grinders itself—and right in Gao’s own city, Suzhou.

 

But with Gao’s setback came inspiration. “Chinese companies are too focused on price,” he says. “You can succeed only if you build loyalty,” and he was convinced brands were the best way to do that.

 

So he started Positec to manufacture and distribute his own branded power tools, rolling out his Worx label in 2004.

 

“I think too often Americans have a negative perception of Chinese companies,” says Duncan. “But I have a unique perspective. I was impressed with Positec’s operation, which was entrepreneurial and driven by innovation.

 

“He was starting the Worx brand of tools and was interested in joining forces, so we began talking,” says Duncan. In late 2005, Gao hired Duncan to head up his North American operations to sell Worx and Rockwell lines of home improvement tools.

 

Also that year, the company selected Charlotte for its North American headquarters. It chose the Queen City over Atlanta and Chicago because of its proximity to Mooresville-based Lowe’s Cos. Inc., which has become one of the company’s largest customers.

 

“It just made all the sense in the world to be right next to the second-largest home-improvement retailer,” Duncan says. “It was the best decision we ever made. Our business with them has really expanded, and I think being here and having this office so close just makes doing business so much easier.”

 

Some of the same advantages apply since it is also relatively close to the Atlanta headquarters of Home Depot.

 

Duncan adds that it was also “because of the people.”

 

“There are so many talented professionals in the Charlotte region,” he says. “We have some of the best, brightest, and most experienced in the home improvement technology industry right here and we couldn’t pass up the opportunity to tap into that.”

 

Launching the Brands

 

Rolling out Rockwell and Worx brands of home improvement tools through Positec here in the U.S., Gao and Duncan faced stiff competition from some of the biggest names in the industry including Black & Decker. At first, breaking in with retailers such as Lowe’s, Home Depot and Sears was not easy. Sears and other clients weren’t receptive to the company’s brands, preferring instead that the company continue to provide the private-label tools carrying the store’s brand.

 

Fortunately, Duncan reached back to his experience at former employer Robert Bosch GmbH with television marketing directly to consumers, and in 2008 Positec aired its first infomercial around a lightweight, cordless lawn trimmer—the Worx GT. That year, the company sold 400,000 units, Duncan says, more than doubling the entire market.

 

As sales climbed, consumers began asking for Worx and Rockwell products, resulting in a change of heart from the big-name buyers. Retailers such as Lowe’s took notice and agreed to carry the products on their shelves, finding that infomercial products sold at a higher rate than most other brands.

 

Positec became a supplier to Lowe’s in October 2009 and was named its 2010 Innovator of the Year among Lowe’s 2,500 suppliers, becoming the first company to win a Lowe’s Supplier of the Year award in its first year as a vendor.

 

Positec was also awarded 2011 Product of the Year by DIY Weeks, the leading European trade magazine, for the Rockwell Sonicrafter oscillating tool and the G-Force angle grinder in the power tool category and the TriVac blower/vacuum and the Eco cordless mower for the garden tools category.

 

Also in 2011, Positec Tool Corporation settled into its present location in 25,000 square feet—the entire third floor—of the Linville Building, which is co-located with its 26,000-square-foot reverse-logistics warehouse facility in the Perimeter Woods Business Park in the Huntersville area.

 

In addition, the company relocated its retail distribution facility from Long Beach, Calif., to about 120,000 square feet of industrial space in Huntersville Business Park.

 

Today, Positec maintains facilities in China, Italy, Spain, Brazil, and Australia, and here in Charlotte, Memphis and Chicago, and also in Canada.

 

Positec’s U.S. sales last year totaled over $200 million and made up over half of the parent company’s total revenue. With consumers spending more on home improvement, Duncan expects Positec’s U.S. business to achieve double digit annual growth over the next few years. Further, with certain products such as lawn trimmers, Positec is gaining market share and creeping up on industry giants such as Stanley Black & Decker Inc.

 

“We’ve created more than 100 high-paying jobs in the United States,” Duncan notes, “and also a number for our business partners here.

 

All told, the global Positec Group is made up 4,000 employees operating in 12 subsidiaries worldwide with roughly $400 million in revenue. Gao is still sole owner.

 

Gao, who remembers leaving a state-owned company to start his business with the help of suppliers who allowed him to defer payments, says he has enough money. Except for one possibility he’s happy to contemplate: “Unless I buy Black & Decker,” he says with a smile.

 

Serving the Marketplace

 

Positec Tool Corporation’s customer service center is located right in the same building. Customer service representatives answer phone calls and emails from end users, retailers, and manufacturing and distribution partners.

 

“What we’ve found is that, in order to truly deliver value to our customers and partners, we have to be close to them. You can’t get closer than our headquarters.”

 

Innovation is Positec’s calling card, Duncan says. The company has developed a robotic lawn mower and a safe chainsaw called the “JawSaw.” The latter features a blade that’s partially enclosed to prevent injuries.

 

“It’s an industry with giants,” he says. “We’re definitely the smallest guy in the block. But we can offer innovation that maybe they don’t have or can’t provide. Or maybe we’re quicker on the draw than they are. That’s kind of been our niche. The only way we’re going to win is by being different.”

 

“What we’ve done,” Duncan continues, “is strike out on our own with premium pricing. Sure, you can get home improvement products cheaper elsewhere, but our products will outlast the competition year over year. Our premium pricing is designed to provide extra value for customers, most of whom will not need replacements or repairs, even through heavy use.”

 

Regarding Chinese manufacturing and its role and image within the United States, Duncan points out that the tide is slowly changing. In the past five years, wages have almost doubled for Chinese workers, placing many manufacturing centers in the country at a disadvantage.

 

Additionally, he notes, shipping large, bulky items from China is becoming cost prohibitive, causing many companies to begin investigating the benefits of transferring tasks to the United States. “We’re even considering transferring some functions that are now done in China to our North Carolina facility,” Duncan notes.

 

With the Worx and Rockwell brands putting out innovative products year after year, it seems that Positec is right on track to gain market share in the home improvement industry. At the company’s headquarters, engineers pore over customer feedback in order to define what needs to be done to create products that not only serve to make home improvement tasks easier, but also to construct design ideas that minimize cost and space while increasing efficiency.

 

“What our team is most committed to,” maintains Duncan, “is making life easier for home improvement enthusiasts the world over.

 

“Give us a home improvement task, and we’ll make it easier to complete and help you get it done faster. We know that in Charlotte, we’ve got the right people to help our customers get the job done.”

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