Walt Smith retires after leading Thombert for 40 years

NEWTON, Iowa—Thombert Inc. has thrived for the last 40 years with Walt Smith at the helm. His reign as the top executive of the firm has come to an end and he has passed the baton on to two members of the third generation of the Smith family and the company's long-time president.

An innovative leader in the polyurethane industry and one of the early members of the Polyurethane Manufacturers Association, an organization in which he has remained extremely active since its early days, Smith has stepped down from his posts as CEO and chairman of Thombert.

His daughter, Lara Nicholson, has taken over as chairman of the business while his son, William Smith, has been named executive vice president. The CEO post will be filled in the future.

Dick Davidson, the president of the Newton-headquartered manufacturer of urethane wheels and tires for the electric fork lift market, will continue to run the day-to-day operations, as he has since 1994.

Smith, 71, has had a highly successful career at Thombert—which operates production plants in Newton and Brooklyn, Iowa—and at ITWC Inc., a company he founded in 1988 and built into a very profitable prepolymer producer.

Today Thombert, which has a work force of about 135, is the largest manufacturer of urethane tires and wheels for electric fork lift trucks in North America, Smith said.

The right fit

Co-founded in 1946 by Robert and Tom Smith, Walt Smith's father and uncle respectively, after Robert returned from World War II, Thombert has grown steadily over the last 73 years. Initially, the business was a wood working operation where Robert Smith made custom kitchen cabinets.

Thombert branched out into the manufacturing of products made with a then little known material, polyurethane, in 1958. It was the sixth business Bayer A.G. licensed to make polyurethanes in North America. Thombert molded all sorts of polyurethane goods but ultimately its development of urethane tires and wheels marked the beginning of the firm's very steady growth.

Walt Smith joined the firm on a part-time basis as a teenager during summers in the mid-1960s, working in the plant at a variety of jobs including making thermoset polyurethane.

It was around that time that Thombert slowly began producing tires and wheels for a single client and eventually for other fork lift companies.

Walt Smith's high school years were spent in Indiana at Culver Military Academy—now called Culver Academy—where he said he received an outstanding education that helped set the stage for his days in college and in the workplace. He graduated from the academy in 1966.

While attending Iowa State University, he worked at night as a machinist for a machinery maker that was a specialist in water analysis. He graduated from Iowa State in three years, thanks primarily to the prep work he had completed at the academy, he said.

Smith went into the U.S. Army as a second lieutenant immediately after college on a four-year hitch, but got out in less than two as the war in Vietnam was winding down and the U.S. was cutting its military forces.

He had job offers in hand from Standard Oil of Ohio and other companies when he received his discharge, Smith said in a recent interview. He presented them to his father and his dad matched those offers.

"So, I thought, this is a good deal," Smith said. "He's trying to be competitive and he's treating me with respect like he always has. So I went to work for Thombert."

It was a move he said he has never regretted.

Solid foundation

Smith handled virtually every job on the production floor at Thombert, and during the next eight years he continued to demonstrate strong management and leadership skills.

He also became heavily engaged with the PMA, which was formed in 1972. He was especially involved as head of the organization's statistics committee, which aimed to create best practices guidelines. That included activities related to the use of MOCA, a carcinogen that the U.S. Occupational Safety and Health Administration ruled in 1973 was dangerous and virtually unusable.

Thombert didn't use MOCA in its products but Robert Smith, then president of the PMA, and his son backed the PMA and its members as the little organization took on OSHA in a battle over MOCA. It took many years to end the battle but eventually the PMA prevailed, thanks in part to the guidelines created by Walt Smith's committee.

Ironically, Smith recalled with a laugh, "I had a truck load of the material headed to Thombert when the temporary emergency standard (dealing with MOCA) was published by OSHA in 1973. I turned the truck load around and we never used it because we had alternatives."

Throughout the 1970s the company grew steadily, especially with its urethane wheel and tire production. "Gradually, we decided to phase out fabrication and custom molding," Smith said.

By 1990 the company completed the transition strictly to being a producer of tires and wheels. "We didn't encourage anything else," he said.

Smith became president of Thombert in 1979, eight years after he joined the firm full time. He was 29. His father appointed him to the post but continued to wear the CEO and chairman hats.

"I guess the biggest high in my career was being named president of Thombert," and knowing his father had that much confidence in him, he said.

A risk taker and innovator, Smith branched out in 1981 and started an offshoot business, Petrolast Inc., a maker of urethane molded goods for the oil and gas drilling industry. It was a good idea at the time, with oil prices going at up to $40 a barrel.

Two years later, it became a bad idea as oil prices plummeted down to $6 a barrel and the number of working oil rigs in North America fell from 5,000 to about 600 as the industry collapsed, as did Petrolast, which was owned and operated as a Thombert subsidiary.

It was a disaster for Smith and Thombert, which for a short while lost 90 percent of its book value. "It was a huge loss for the company," he said, "but I paid everything off and I took a personal loan to buy any shares in the business people wanted to sell." At age 43, he owned 51 percent of the company.

Smith didn't have to lay off employees at Thombert after Petrolast failed and he worked hard to get the firm back on its feet. And though it took awhile, he was successful.

"Actually, when I failed, I'm proud that everyone got paid, employees didn't lose jobs and there was no bankruptcy," he said. "We've only taken public money once … and we paid that back."

Smith became chairman and CEO of Thombert in the early 1980s when his father retired completely from the business (although Robert Smith remained on the board of directors). Embarking on a career in public service, Robert Smith was elected mayor of Newton and continued to hold that post for four terms. He died at the age of 90 in 2007.

Rebounding from failure

An entrepreneur at heart, Walt Smith did not let the failure of Petrolast deter him. But he made sure Thombert was fully on its feet before he launched another business, which he finally did in 1988 when ITWC became a reality.

After years of research, he was sure he could make the business successful. Smith did not attach the company to Thombert after the Petrolast fiasco. He incorporated the business and capitalized it separately in order to make it stand or fail on its own.

ITWC produced curatives, additives, machines and molds, although ultimately mold production was transferred to Thombert.

Meanwhile, in 1992, he founded another company, Cyco Inc., a distributor of inline skate wheels.

Smith continued to run all three businesses but the growth of the firms was challenging. In the early 1990s, he selected long-time employee Dick Davidson as the new president of Thombert, a decision he has never regretted, he said. "It was one of the best moves I ever made."

While continuing as chairman and CEO of Thombert, he focused heavily on building ITWC into a very successful company and making Cyco a strong business. He later named Roger Smith, who is not related, as president of ITWC and that firm grew at a fast pace.

In 2004, Smith cleared his plate a little when he sold Cyco to RevTek of Illinois Inc.

Walt Smith remained in the top posts of Thombert and ITWC, balking at the numerous suitors who always seemed to be waiting in the wings ready to buy the companies. That was until 2012 when BASF came calling and, after several meetings and some serious negotiations, made an offer to buy ITWC.

It was the kind of offer Smith found hard to refuse. Most important to him was that under terms of the agreement, the 80 employees at ITWC would retain their jobs and the production facility would continue to operate in Malcom, Iowa. He sold the company to BASF and it continues to flourish today.

For the last seven years, Smith has continued with Thombert, but also invested in real estate and a business or two.

As Smith prepared to retire from the company, more suitors appeared with offers to buy Thombert. Smith and his children considered them but ultimately turned them down. One offer was exceptional, but the company pursuing Thombert wouldn't guarantee the jobs of the firm's 135 employees nor did it like Thombert's generous profit sharing plan, Smith indicated.

Ultimately, Smith and his family decided that was the wrong road to take and Smith's daughter Lara and son William stepped up to lead the company into the future.

"I think it was the right decision, and we're excited about the future of the company," William Smith said.

Now with Thombert in the hands of a third generation, Smith said he'll have more time for recreational travel "and for my charitable foundation, called the Smith Family Foundation. I'll involve myself with that heavily. It allows me to give back to so many people who have helped me."

The foundation also helps organizations that need it and the city of Newton that helped make Thombert so successful, he said. "I'll devote a lot of time to public service," Smith said. "I want to give back."