Family-run business hands off the future

From grandfather to father to son, supplier Lacks Enterprises has passed through 60 years of family management.

But as it prepares for a new era of growth plans, the Grand Rapids, Mich., producer of vehicle exterior trims and interior finishes has handed over leadership to non-family executives.

In addition to its existing core businesses, Lacks is preparing to expand into a new industry segment, producing carbon-fiber wheels. The company acquired Emergent Carbon Wheels of Kansas City, Kan., in 2018.

That move positions Lacks to be more of a player in electrification, since carbon wheels offer new lightweighting opportunities.

Richard Lacks Jr., who was CEO since 1999, has handed the helm of the company to Nick Hrnyak, 57. He had been president since 2015.

Mike Clover, 50, will succeed Hrnyak as president after being CFO. Clover joined the company in 2006.

Lacks, 70, said the moves are part of a strategic succession plan to support the company's growth as the industry evolves.

The third-generation family executive will transition to executive chairman on the company's board.

"I've been here 47 years — I've seen 47 different changes," Lacks told Automotive News regarding the pace of auto industry change.

"The industry is a dynamic, competitive business and you have to be on top of your game to compete as a supplier. I've seen many suppliers come and go.

"Our growth has happened because of technologies and R&D and where we spent money," Lacks added. "It's been a challenge. It's been physically tough. It's been emotionally tough. It's been mentally tough."

Lacks said he doesn't expect a shift in leadership style and company culture under Hrnyak.

"Even though Nick's last name isn't Lacks, it might just as well be, because he's an extension of the Lacks family in his thought process," Lacks said. Hrnyak "understands exactly what has to happen, how it should happen."

Hrnyak said he plans to continue to capitalize on interior technologies and carbon-fiber wheels.

"We see significant growth potential with our finishing technologies in the interiors space," Hrnyak said. "These are initiatives that have been in the works that are hitting the marketplace, and we have a lot of momentum in these categories.

"We have a lot of thought around what an electric vehicle is going to require: extended battery, miles per charge," he added. "Initiatives in lightweighting and carbon fiber will align nicely with what we're seeing as a complete environment change in the OEMs' mentality on electrification in vehicles."

Hrnyak joined Lacks Enterprises in 2002 as director of sales for the company's Plastic Plate division and later was promoted to general manager and vice president.

The company had $550 million in revenue in 2019.

"We have technologies and efforts to enable and hopefully lead that change in that space for EVs," Hrnyak said.

In his new role, Hrnyak is optimistic about the company's future, despite the impact of the COVID-19 pandemic and microchip shortage crises trickling down the supply chain.

"Historically, times like these have allowed our company to shine and gain more value with the OEMs, so we feel pretty good about our positioning today," he said.

But he remains cautious about the industry at large.

"We see a lot of decisions made that are very short-term type decisions," Hrnyak said. "If this pandemic is extended, I think there's going to be some financial crisis, and you're going to see stress in the supply base that's going to cause further problems for OEMs."

Lacks anticipates challenges to come as the industry electrifies.

"Going from a gas combustion engine to electric vehicles as quickly as they want to in the next 15 years is warp speed," he said.

"That's going to be the real challenge in the supply base, as well as for the OEMs: Can you get there as quickly as the industry feels like it has to, and do we have the infrastructure in this country to be able to support it?"

"Those are serious questions," Lacks added. "Those are the questions I can't answer."