When Charles Saleh arrived at Southern Engineering headquarters in 1994, he found mass destruction from a recent tornado, obsolete equipment, a handful of employees and only one personal computer in the entire building. Charged with the seemingly impossible - rescuing the bankrupt business - his future looked bleak. "Normally when you start a company, you start at ground level," Saleh replied. "We started below ground. People thought I was crazy."
The situation was a far cry from the company's heyday. Founded in 1911, Charlotte, N.C.-based Southern Engineering was one of the premier steel fabricators in the Southeast. Dubbed "Little Pittsburgh" the company's Wilkerson Boulevard headquarters fabricated and erected most of the buildings in Charlotte and the surrounding area, including Independence Arena (the old Charlotte Coliseum), Ovens Auditorium, and power plants dotting the region. Many current competitors launched their careers and learned the steel fabrication business at Southern Engineering.
But in the economic environment of the early 1990s, the company began to falter.
Gregg Lucas, industrial analyst at Wachovia Securities, explains, "The steel business is a notoriously cyclical business. When the economy catches a cold, the steel catches the flu."
Additionally, Southern Engineering had relied too heavily on large projects for big corporations. The narrow customer base left the company in the lurch as corporate giants scaled back or placed projects on hold during the recession in the early 1990s. Saleh says, "When the big customers dried up, there wasn't enough to keep it alive."
Old, decrepit facilities only added insult to injury. With creditors mounting, the company filed for bankruptcy. Its subsidiary company, Catawba Rebar, shut down completely, and Southern Engineering employees waited for the ax to fall.
But much to their surprise, it didn't. The Nuqul Group, a worldwide conglomerate with roots in the Middle East, saw opportunity in the ailing business. They set up a holding company, Beta International, and purchased Southern Engineering and Catawba Rebar in 1994. Nuqul poured $5 million into new equipment and technology, and Charles Saleh was appointed the task of the turnaround.
Some weren't so sure that resuscitating the fabricator was such a good idea. The steel industry is inherently risky. Analyst Gregg Lucas comments, "When companies tighten their belts, they tend to delay building. The cycles are particularly tough, exaggerated at times because it's not just what happens here in this country, it's the whole rest of the world." He adds, "There's always the question of how foreign economies will affect our supply and demand."
"Why steel?" counters Saleh. "You will always need steel. Steel is one of
the basics in life." This engineer-turned-businessman actually welcomed the challenge.
"Show me an industry that is not competitive. The issue is not competition. It's how much confidence you have in yourself."
Still, Saleh had to instill that confidence in his weary employees. "I had to build trust," he says. "I told them that we were going to be the premier company in this area again. But I didn't just want them to hear my words; I had to prove it." On the offensive, Saleh acted more like a coach than a president. He rehired laid-off employees and encouraged creative problem-solving. He overhauled inefficient and outmoded practices. And he instituted training, quality improvement and safety programs that exceeded industry norms.
Saleh's management philosophy is quite simple. "It really comes down to the basics. The number one rule is trust. Your word is your bond. When you do the right things in life and treat people well, the rest will follow."
Bankruptcy had also eroded the trust of suppliers and customers. Saleh carefully set out to rebuild those relationships. He paid suppliers COD until the company regained credibility. He boldly approached potential customers, bidding on small projects, and earning their respect by exceeding expectations. "We had to start small," he recalls. "We told them that we were a new company. Give us a chance and we won't let you down. And we didn't."
As the sleeping company came back to life, Saleh looked to expand Southern's geographical reach. His goal was to offer turnkey service to contractors and developers throughout the eastern United States. With Southern making a steady comeback, he set his sights on Lynchburg Steel.
Unlike Southern Engineering, Lynchburg Steel had never fallen on hard times. This Monroe, Va.-based fabricator had grown steadily to $45 million in sales in 1996. With another facility in Abingdon, Va., the outfit was clearly a success story. Beta International acquired Lynchburg Steel in 1997.
The sale did not affect any of the local jobs, and the management team was left intact. Saleh notes, "Nothing changed except ownership. The company is still 'humming' like it has always been." Founder, C.V. "Andy" Anderson is now chief operating officer.
With Lynchburg Steel in its fold, Beta International has extended its customer base as well as its geographical reach. A perfect complement to Southern Engineering's markets, the combined companies now support customers from Massachusetts to Florida.
Saleh has diversified Beta International's affiliate companies into new markets. Business lines have expanded from steel fabrication services and rebar for construction into non-construction fabrication, like components for truck bodies and chassis. Capitalizing on the synergies of its affiliates, Beta International is now a powerful one-stop resource for the construction industry.
In recent years, Beta International has provided all the steel and fabrication services for Concord Mills Mall, IBM facilities, and the University of Maryland Performing Arts Center. Saleh recognizes that talented managers are critical to the company's ongoing successes.
"No one claps with one hand. You always have to have good people." He considers Bob Hackworth, executive vice president; Shawn Plyben, engineering manager; Jim Anderson, director of operations; and Jim Patterson, financial controller, invaluable to company. He also credits Tony Glaser, vice president at Carolina Rebar, as well as Andy Anderson and his son, Doug, at the Virginia facilities.
Charles Saleh admits that engineers don't always make the best business-people. "Usually, when you're so technically-oriented, you think of things in minute details. But you can't run a business that way. That's one thing I've had to overcome."
from the heartland to the south
He also had to overcome bitterly cold winters in the Midwest. As a young man, he visited his sister in Des Moines, Iowa and decided to attend Iowa State University. "I visited in the summer and it was absolutely beautiful," he remembers. "I had no idea it could reach 88 degrees below in the winter."
But Saleh was no quitter. He obtained a bachelor's degree in mechanical engineering in 1980 then headed south, completing a master's degree in mechanical engineering at Georgia Tech in 1982. He worked for IBM until 1991, when he launched Alpha International Trading Company, a pulp and paper export business, that he still runs today. Saleh also holds a N.C. Contractor's License and a N.C. Real Estate Broker's License.
When Nuqul Group tapped him as president of the newly created Beta International in 1994, the job appealed to his entrepreneurial spirit. Unfazed by the seemingly impossible task, he said, "One of the things I learned from my dad was persistence. Keep knocking on that door until it opens."
At 42, he is surprisingly young for such a momentous undertaking. But his biggest priority is his wife, Mary, and their five children. Saleh is also deeply committed to the community; "We need to be known for our ethics and for making our community a better place to live."
He has demonstrated this dedication, serving on the Charlotte Chamber's Board of Advisors, as Chairman of the Manufacturing Flagship for Carolina Advantage, and on the Charlotte-Mecklenburg Development Corporation. Saleh is also a member of the Westside Business Association and supports programs that target Westside youths. "It's important to help children get the best start."
Southern Engineering has grown from 13 employees in 1994 to 130 today. Carolina Rebar, once empty and lifeless, now employs 30. Lynchburg Steel is better than ever. Although Saleh is proud of material achievements, he has a broader vision of success. "It's easy to be successful upfront. But the tough part is in sustaining it. Now that we have grown to this level, my next priority is not only to sustain it, but to make this a solid and stable organization."