Aschinger Electric Company Names Martin As President

Aschinger Electric Company, one of the largest electrical contracting firms in St. Louis, is making an unusual transition to a fourth generation of family management.

Emily Aschinger Martin has been promoted to president, a position formerly held by her father Eric Aschinger. Scott Aschinger, Martin's cousin, was named vice president of operations. Eric remains with Aschinger Electric as chairman and chief executive officer. His brothers, Jack Aschinger and Keith Aschinger, also remain officers of the company. Jack serves as the senior vice president, and Keith is the administrative vice president and corporate secretary. Scott Aschinger is Jack's son. Scott will continue to serve as president of Aschinger Electric Communications, Inc., a business unit of Aschinger Electric Company that designs, installs and maintains communication systems, such as telephone and voice-over internet protocol (VOIP).

According to the U.S. Small Business Administration, only 12 percent of family-owned businesses make it into the third generation. It is even rarer for a woman to become president.

"This transition is part of a carefully planned, multi-year process designed to provide seamless leadership," Eric Aschinger said.

"My father had two heart attacks within a week of each other in 2001, and that made him think seriously about transition," said Martin. "Their father, Francis, died suddenly in '78 and they had to learn to read financial statements on the fly," she said.

In contrast to the way he and his brothers took over the business thirty years ago, Eric Aschinger said that they did not want this transition "to be an event, we wanted it to be a process." Francis Aschinger died within three weeks of being diagnosed with cancer in 1978. His three sons all were in the business, but Eric became president because he had already gotten his own electrical contractor's license in addition to his electrical engineering license. "I already had the licenses, so I seemed to be the right one even though I was the youngest," Eric said. "Both my brothers bought in on that and we shared responsibility." Eric said he did not want the new generation to make the same mistakes he made. "I was good at running jobs, but that is different from running a business," he said.

So, seven years ago, the Aschinger family began a process of transferring the family business to a new generation. It was a process that they thought would take seven to 10 years to complete. "We studied failures," Eric said. "We went to FMI seminars, heard horror stories, and decided what to do."

The first major decision was to do something about the increasing division of ownership of the company. Francis' widow owned stock in the company. Eric, Jack, and Keith had stock, and so did their sisters. All of Francis' grandchildren, 17 in total, owned stock. "We decided that only those who were in the business should have stock," Eric said. "Too many of the horror stories were about people outside the family business owning stock in it and not understanding what it takes to run the business, he said. So, the three brothers started the transition process by first buying out everyone else so that when they passed management of the company on they were actually passing control of the company on as well.

Eric had four children, but only daughter Emily is in the business. Jack had three children, but only son Scott is in the business. Keith also had three children, and his son Craig is the only one in the business. None of the sisters' children went into the business. Emily is a lawyer; Scott is an electrical engineer with an MBA; and Craig has a psychology degree and taught English in Japan before entering the electrician's apprenticeship program. Craig is working for the company as a journeyman electrician.

Two years into the transition process, the family still was not certain that the company would stay in the family. "Someone else was interested in taking over the business," Eric said. The family had Emily, Scott, and Craig tested "to see if there was an heir apparent," he said, and also had Eric, Jack, and Keith tested.

"Both Emily and Scott fit the profile for business leaders," Eric said. "They both were in the 99th percentile and between the business side and the construction side they complement each other well," he said.

How did the family decide which of the two of them would become president? "We didn't," Eric said. "We let them decide. We told them that if there was going to be a problem, it was not going to be our problem; it was going to be theirs. They sat down with the consultant and came up with a set of guidelines as to what decision they each would make independently and what decisions they would make together," he said.

Emily said that their model is the relationship that Tracy Hart and Dirk Elsperman have a Tarlton Corporation. "Scott and I sat down with Tracy and Dirk to discuss how they work together," Martin said. "Our relationship is very similar: We are a partnership. He is very much on the operation side; I am on the sales and administrative side."

That is not to say that Eric and his brothers were not keeping an unobtrusive eye on their offspring. "We watched to see who people went to naturally when they had a problem," Eric said, "and they went to Emily."

After the settling the succession, there began the long process of preparation. "I made them both join business owners groups to learn the business of running a business," Eric said. "We sent them to FMI training and NECA training. I would meet with them once a month and talk about business, teach them how to read statements, and take them to the bank with me to get line of credit or to the bonding company with me. And I showed them what I look for when I look at job reports, the things that might raise a red flag, which is something nobody showed me."

Emily Martin and Scott Aschinger represent the fourth generation of the family in electrical contracting, going back almost a century to their great-grandfather, Otto Aschinger, who began replacing gas lights and oil lamps with electric wiring in 1912. He left St. Louis during the Great Depression in the 1930s for opportunities in the California shipyards. His son Francis founded Aschinger Electric in St. Louis in 1940.

Eric said that when Emily was a child, he used to bring templates home from work and make his children lay them out for parking lot wiring. When she was 10, he made her wire all the receptacles in a house he was building. Emily recalls visiting potential job sites with her father and counting light fixtures for estimates. Nonetheless, Eric said he did not expect her to enter the family business.

As an adult, Emily had gone off in her own direction, Eric recalled. "She became a lawyer and went into private practice," he said. 'Then after she had practiced law for nearly five years, she called and said she wanted to come to work me. I remember my first thought was, "What do I need a lawyer for",' he said. That was in 1998.

Eric said he made Emily estimate jobs, run jobs, and close jobs. "She did 100 percent of what it takes to be a project manager so that she could relate to the issues that others face," he said. She then added sales and marketing roles and in 2004 she was named vice president of business development.

Scott Aschinger joined Aschinger Electric Company in the early 1980s as a draftsman and project engineer. He has since earned an MBA as well as registration as a professional engineer and communications distribution designer, and he started and runs Aschinger's communications division.

With annual billings of more than $44 million, Aschinger Electric Company is one of the largest electrical firms in St. Louis. The firm employs more than 200 people, including more than 170 electricians, communication technicians and lighting technicians.

Emily intends to continue the company's reputation for innovation. "The imperative of the industry today is to move in a new direction," she said. "We are moving from reactive services to proactive: we are doing predictive and preventive maintenance, flash hazard analysis, and light maintenance services (changing light bulbs and ballasts)," she said.

"There is an emphasis today on going green and saving energy that has people going into lighting retrofit. We have someone doing just retrofits: he is project manager. That is what I mean by being proactive: we can sell it," she said.

"I would always rather sell the work as opposed to bidding the work," Eric said. "We would get information about the future directions of the industry from NECA (National Electrical Contractors Association) meetings and we would try to be a one stop solution for the customer," he said. "Some things work and some don't, but we've always looked for something different," he added.

What is next for Eric, Jack, and Keith? "I said that I would stay as CEO for two years," Eric said. "There is always some fallout in a transition and we wanted to avoid that, so we are going slowly.... Jack takes care of the trucks, because that is what he likes to do, and Keith is still into computers."

 

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