A sad day in Les Schwab country

He built tire empire 'with hard work and common sense'

Ernestine Bousquet / The Bulletin /

Published May 19, 2007 at 05:00AM

For six decades, Les Schwab was the man behind a tire company that has been a household name, keeping generations of West Coast families on the road.

On Friday, Schwab's storybook career became part of the annals of history. The founder of the Les Schwab Tire Centers, one of the largest independent tire dealers in the U.S. and the second-largest private employer in Central Oregon, died after months of declining health, company officials announced. He was 89.

He is survived by his wife, Dorothy, four grandchildren and several great-grandchildren. His son, Harlan, died in 1971 and his daughter, Margaret, died in 2005. The company will remain family-owned, officials said in a news release.

To the public, the man who built the run-down Prineville tire shop he bought in 1952 into a billion-dollar-a-year tire empire was an iconic figure who appeared in commercials wearing his trademark Resistol hat and roaming his 80,000-acre ranch southeast of Prineville.

To friends and associates, Schwab was modest, humble and intensely private.

And to Rich Priday, a 33-year veteran of the company and retired senior executive vice president of marketing and distribution, his mentor and boss was a businessman who worked hard and commanded respect.

He was also a ”take-the-bull-by-the-horns” businessman who never liked to lose a bet or an argument.

Priday recalled a time when Schwab and Tom Freedman, the company's chief financial officer, were arguing about the distance between two points. They went outside to test their theories by measuring the distance between two rocks. Realizing that he had calculated wrong, Schwab moved a rock when Freedman turned away.

”I have tons of memories with Les. They are all fantastic,” Priday said. ”He built a tremendous company and people. He let every person have a lot of opportunities.”

Humility was a Schwab trait, said those who knew him, like Pauline Shelk, a longtime family friend. He was a man as devoted to his family as he was to his company.

”He and Dorothy, despite the way Les Schwab (Tire Centers) went, they were the same people I met in 1956. There were no changes,” Shelk said. ”I just had so much respect for him.”

Longtime friend Bob Moody said Schwab helped him get on his feet as a young man.

At 11, Moody started delivering papers for The Bend Bulletin, where Schwab was circulation manager at the time. By the time Moody got to high school, he was working directly for Schwab.

”He found all kinds of extra work for me because he knew my mother and me needed that money.”

Later, when Schwab left The Bulletin to start his tire company, he offered Moody a job. Moody declined and went on to become publisher of the La Grande Observer.

”For years, (Schwab) said if you worked for me when I asked you to, you'd be worth this,” Moody said referring to the generous profit-sharing plan that is the hallmark of Schwab's billion-dollar company. ”But the newspaper business was good to me.”

A pioneer's legacy

Schwab embodied a pull-yourself-up-by-your-bootstraps mentality tempered by a fatherly desire to help his employees succeed.

He eschewed the cookie-cutter corporate philosophy and cultivated his own brand of executive, like Priday, who worked his way up from the bottom. Starting out in sales in Klamath Falls, Priday ended up working for the company for 33 years. Never once did Schwab tell him what to do, Priday said.

”He always knew we were going to make mistakes, but he allowed you to do them,” Priday said. ”He delegated responsibility.”

Schwab documented his company's rise and his business philosophy in his autobiography, ”Pride in Performance: Keep it Going!” written in 1985.

”Success in my mind comes from having a successful business, one that is a good place to work, one that offers opportunity for people and one that you can be proud to own or be associated with,” Schwab wrote.

Rooted in Prineville since its inception, Schwab's privately held company expanded its reach by building stores first in Oregon's small towns, and then in cities across the West.

The company now has 410 stores throughout the West and 7,700 employees, according to the company. The stores offer a ”supermarket selection” of tires and a host of services, from brake jobs to new batteries.

Long a backbone of Crook County, the company epitomizes Prineville's values, said Crook County Judge Scott Cooper.

”He got where he was with hard work and common sense and by sticking to core principles. He loved his family and he loved his job,” Cooper said. ”I think that Prineville and Crook County are a little less rich. Les was instrumental in putting us on the map and building a new economy.”

That stamp remains even though the company plans to move its corporate headquarters to Bend by fall 2008.

Schwab kept Prineville alive in the midst of a dying timber industry, said former Prineville Mayor Steve Uffelman.

”His organization has been an important part of the stabilization of the economy of Prineville,” Uffelman said.

On a more personal note, Uffelman said Schwab modeled to him what it means to keep promises.

”He told you when you give your word, you keep it,” Uffelman said. ”That's one thing I learned from Les. That's what he expected out of me.”

Schwab's legacy is about more than keeping cars on the road.

His generous profit-sharing plan - a deal that he offered to his second employee in 1954 - has secured retirements for thousands of employees.

”It's such a simple concept that you lose sight of how well-executed that concept was throughout the life of his business,” said longtime Crook County resident John Shelk, the managing director of Ochoco Lumber Co.

The profit-sharing plan became the cornerstone of the company, and is part of a generous benefits package where 50 percent of the company's profits goes back to employees. Schwab explained his motives in his book.

”The more you share, the more you have left for yourself,” Schwab wrote. ”I like to think about it as having it left to expand the business, and to create more opportunity for young people.”

Shelk, who along with Schwab met with politicians in the 1980s to promote the need for a business-friendly climate in Oregon, reiterated how humble Schwab was and how modestly he lived.

”His name was a trademark. It was known through the western United States, so for politicians to meet the man that held the name Les Schwab was an awe-inspiring experience for them. And to recognize that he was an ordinary man like everyone else. He had a brilliance that was so well hidden that he just appeared as just the man next door.”

Building an empire

At 15, Schwab was an orphan.

By his mid-30s, he had planted the seed of his tire empire.

With a loan from his brother-in-law and $3,500 of his own money, Schwab bought O.K. Rubber Welders in 1952 for $11,000.

Part of a franchise, the Prineville tire shop sold new tires and retreaded used ones. The shop was small, with no running water and an outhouse for a toilet, he wrote in his book.

When he bought the shop, Schwab had never fixed a flat tire in his life. He had no business training beyond selling newspapers, and his formal education ended after high school.

”I thought it, the tire business, had a future,” Schwab wrote. ”I remember telling my wife I thought I was a salesman, a pretty good one, and maybe that ability could be used in the tire business.”

In Schwab's first year of business, the store's sales shot from $32,000 to $150,000. He opened his second store the next year in Redmond.

Early on, Schwab brought the tires out of the warehouse and into the showroom so that customers could choose their own product.

While the ”supermarket selection” became his stores' niche, customer service was at the heart of the company's success.

Personal service drives his stores, where employees in crisp, white shirts and hair cut above the ears are known to run out to greet customers as they drive in.

”We are different from most of the American corporations, as we think the most important people in the company are the people on the firing line; the ones who sell, do the service work and take care of the customer,” Schwab wrote in his book.

Customer service helped make the company the third-largest domestic independent tire dealer, according to rankings by Modern Tire Dealer, an industry magazine. Schwab was honored as the magazine's National Dealer of the Year in 2000.

Gov. Ted Kulongoski also chose Schwab for the first Governor's Gold Awards in 2003 for ”contributing to Oregon's greatness.”

As he expanded his company, Schwab relied on key people who helped him build the company.

”The future of any company is seldom around one man,” Schwab wrote in his book. ”You build a business one step at a time, block upon block, one step up the ladder, step by step.”

In return, Schwab rewarded them with promotions and opportunities for their own store. At the time he wrote his book, Schwab said he never had hired a manager from the outside.

His policy of promoting from within made the company known for being a place where employees could start out changing tires and end up as store managers. Or even chairman of the company, like Phil Wick, who started working at the Bend Les Schwab tire store in 1965.

Wick did not return calls seeking comment Friday.

”Les built one of the greatest companies, with some of the best employees, not just in the West, but in the world. He left us a remarkable legacy, and we are all committed to seeing that it thrives,” Wick said in the company's press release.

Although Schwab eventually handed Wick the reins, he came into the office every day to answer letters and keep tabs on the company until his health started to decline.

Schwab was known for his penchant for driving fast. His driving - both in and out of the warehouse - was legendary, Priday said. When Schwab took suppliers on rides through the warehouse, he would hit pallets and skirt forklifts.

”It was well-known in the industry,” Priday said.

Driving every day to have lunch with his key executives at Meadow Lakes Golf Course was ”an adventure,” Priday said.

Wayne Van Matre, the golf course manager, said Schwab was friendly and easy to approach, usually ordering soup and sitting at a favorite table in the corner of the room.

”In the true meaning of the word, he was a gentleman,” Van Matre said. ”He didn't show airs.”

The company said in the press release that funeral services will be private. Les Schwab's family has requested that cards and condolences be addressed to the Les Schwab Family, c/o Shirley Jacobs, P.O. Box 667, Prineville, OR 97754.

Cooper, the Crook County judge, announced in a press release that in commemoration of Schwab and his importance to Crook County and Prineville, flags at county and city public buildings will fly at half staff through Memorial Day.

Schwab's life

Oct. 3, 1917: Born Leslie Schwab on a homestead near Bend.

1933: Both of Schwab's parents die, leaving the 15-year-old, his older brother and sister, and one younger sister on their own.

1933: Schwab rents a room at a Bend boarding house for $15 a month, supporting himself by delivering newspapers while attending Bend High School.

1935: Schwab graduates from Bend High School.

1936: Schwab marries high school sweetheart Dorothy Harlan. The two remain married until his death.

June 23, 1940: Son Harlan Schwab is born. Soon after, Schwab leaves his family to serve in World War II with the Air Cadets.

1942: Schwab goes to work at The Bend Bulletin as its circulation manager. He spends nine years in the position.

1952: Schwab purchases franchise shop O.K. Rubber Welders in Prineville for $11,000.

June 30, 1952: Six months after Schwab goes into business, a daughter, Margaret, is born.

1953: After more than quadrupling sales at the Prineville store, Schwab opens a second store in Redmond.

1954: Schwab begins profit-sharing plan for Redmond store manager Frank Canady.

1955: Schwab opens his third store, in Bend.

1956: Schwab changes his store names to Les Schwab Tire Centers, separating from the O.K. franchise.

1957: Les Schwab Tire Centers opens John Day store.

1963: Schwab starts the ”Free Beef in February” program to boost sagging winter sales.

1965: Schwab hires Phil Wick - current chairman of the company - to work in the Bend store.

1966: The tire magnate expands to Idaho, purchasing six additional stores and a retread shop.

1966: Schwab creates the Les Schwab Retirement Trust, putting aside 15 percent of employees' earnings into a company-wide employee trust fund.

1971: The Schwabs' 31-year-old son and vice president of the company, Harlan, is killed in an early-morning car accident.

1983: Schwab suffers a heart attack and turns day-to-day operations over to Wick, but continues to show up for work every day.

1985: Schwab pens his autobiography, ”Les Schwab Pride in Performance: Keep it Going!”

1986: Schwab, outraged at the cost of liability insurance, decides to go without, self-insuring the company.

1999: Schwab breaks ground in Prineville on a second 550,000-square-foot distribution center completed in 2000.

2000: Les Schwab Tire Centers ranked the best national passenger vehicle and light truck tire retailer in customer satisfaction by J.D. Powers for four years running.

October 2000: Les Schwab awarded the national Dealer of the Year by Modern Tire Dealer magazine.

December 2000: Les Schwab Tire Centers does $1 billion in business for the first time.

2005: The Schwabs' 53-year-old daughter, Margaret, dies of cancer.

May 18, 2007: Schwab dies.

- Cindy Powers

”His strong work ethic built one of Oregon's most successful businesses from the ground up, but he never lost track of his roots, sharing his success with communities across the state and contributing generously to help improve the lives of Oregon children and families.”

- Gov. Ted Kulongoski

”He had what he needed, and he gave back to the community.”

- Crook County Commissioner Lynn Lundquist

”When you drive into Les Schwab, somebody is right there to meet you. They're just clean-cut young people who hustle around for you, you know?”

- Crook County Commissioner Mike McCabe

”His organization has been an important part of the stabilization of the economy of Prineville. We would still be struggling, coming out of the loss of the timber industry to a much greater degree than we are.”

- Former Prineville Mayor Steve Uffelman

”He found all kinds of extra work for me be-cause he knew my mother and me needed that money. ... He was just one hell of a good friend.”

- Longtime friend Bob Moody