Media magnate reveals his passion for WesTrac

The private interests of media magnate Kerry Stokes are usually shielded from the public by an array of mechanisms designed to keep prying eyes away.

A visitor, for instance, to the Kings Park Road headquarters of his Australian Capital Equity Pty Ltd enters an unmanned lobby with a desk, a phone and a lift.

A receptionist upstairs uses close circuit television as she makes contact with the visitor below.

It may be a security measure, but it also adds to the privacy maintained by the Stokes empire, giving it an air of mystery.

There is nothing surprising about a private businessman seeking to keep his affairs to himself, but it is unusual for someone in a high-profile role such as Mr Stokes, as chairman of national media group Seven Network Ltd, to maintain it so successfully.

The late Kerry Packer, former proprietor of Channel Nine, was, by comparison, an open book.

So when the man behind major Caterpillar franchisee WesTrac starts to tell you a bit about his business operations, it’s worth listening.

Before Mr Stokes got up to speak at the WA Business News Success & Leadership breakfast last week, he was introduced by Patersons Securities Ltd chairman Michael Manford, who also reminded the audience of the media magnate’s very private causes – such as assisting the Returned Services League to buy Victoria Crosses at auction, helping women widowed by war, and significant art collecting.

“Kerry is very passionate about everything his does,” Mr Manford said.

One of the areas about which Mr Stokes rarely speaks, but one he clearly has a significant passion for, is the WesTrac business.

In essence, WesTrac is a simple business, a distributor for the US-based yellow goods manufacturer,  Caterpillar, in Western Australia and northern China.

With a mining boom occurring in WA and a construction boom in China, it is not difficult to realise that this business is enjoying a very strong period, though Mr Stokes took the time to underscore some of the business principles that he believes have positioned the company well.

Mr Stokes took over the business less than two decades ago, acquiring a 300-employee operation that was in decline and beset with problems.

Among the difficult decisions that were taken was selling off $28 million worth of second-hand iron at fire sale prices.

“Sometimes you have to do things like that to start afresh,” Mr Stokes said.

Today, WesTrac employs 6,000 people, including 300 apprentices, and has at the core of its business three maxims: quality product; a strong value proposition; and a strong customer focus.

“Everybody at WesTrac is trained on customer focus,” Mr Stokes said.

He said this started at trainee level, including trades apprentices in a course conducted by the company because, five or six years ago, it decided the quality of people coming out of the public education system was not of a sufficient standard.

“The answer was to do it ourselves, we could change the curriculum,” Mr Stokes said.

WesTrac apprentices get more than the usual tools of the trade, according to its owner. In the course, the trainee learns English expression, report writing, how to balance a chequebook, as well as how to balance and understand an invoice.

In their final year they get media training, something Mr Stokes claims is far removed from the fact that he controls a media empire.

“It had nothing to with that,” he said.

“What it had to do with was, after they finished six weeks of media training they could speak and communicate and they felt confident; they felt confident to deal with other people.

“As a result, we changed the entire way we do business.”

Mr Stokes said the better trained workforce meant the previous hierarchical structure, with cumbersome reporting lines, could be abandoned and the tradesman doing the work could take a greater control of issues, including working directly with customers.

“Since we trained our apprentices and gave them the tools to express themselves and gave them authority to deal direct from the floor with the client, we eliminated almost all conflict,” he said.

“Everybody accepted that the guy working on the machine was honest and accepted that he was doing the job, we did not have the conflicts and we found that meant we increased the opportunities for people on the floor to grow into more than just being mechanics.”

In interviewing people for the trades, WesTrac looks at more than their professional qualifications or potential with the tools. Mr Stokes said the company looked at their ambitions because its philosophy was that people from the trades were important to have at management level.

Mr Stokes said WesTrac’s current managing director, Jim Walker, has a trades background.

“We try to encourage emulation of that,” he said.

The results of the WesTrac program have been so strong that the course has become a profit centre, offering training services to competitors in the field – something that allows the Caterpillar franchise to expose its operation to potential recruits, an important opportunity in this skills-hungry age.

“Our competition is mostly trained by us and we think that is good because what usually happens is they can’t wait to get back from wherever they are to work in our organisation,” Mr Stokes said.

One anecdote Mr Stokes used to illustrate the benefit of giving younger people authority and providing wider training was the way WesTrac dealt with seemingly intractable issues with its manufacturing operation in China, which was under performing.

“We had all the bright people in the world telling us we could not do this,” he said.

Exasperated, the company sent three young foreman with a brief to fix it.

“Six months later the factory is operating efficiently, output is way above what we expect and these three young men have become managers of engineering and managers of production because they communicate.”

“They were young, they were not oppressive. The Chinese didn’t regard them as coming in and telling them what to do, they regarded these young guys as coming in and sharing with them and the whole atmosphere changed and the whole success of that operation changed.”