Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Street in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision, and global business, the dream drivers that have made the NYSC an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSC and at ICE's exchanges and clearinghouses around the world. And now, welcome, Inside the ICE House.
Lance Glinn:
In 1921, milestones unfolded across the United States. That August saw baseball's inaugural radio broadcast, with Harold Arlin commentating the Pittsburgh Pirates-Philadelphia Phillies game on KDKA in Pittsburgh. In September, the iconic White Castle hamburger restaurant launched, laying the groundwork for the global fast food chain phenomenon. And Lowe's, that's NYSC ticker symbol LOW, made its debut in March, in North Wilkesboro, North Carolina, marking the beginning of a prolific journey for the home improvement giant.
But in September of 1921, little did most people know Raymond DeWalt was on the cusp of revolutionizing job site productivity with his work on an invention called the radial arm saw. Fast-forward three years to 1924 in Leola, Pennsylvania, Raymond began selling his creation, dubbed the Wonder-Worker, and establishing the DeWalt products company. Now, as we sit in the library of the New York Stock Exchange in 2024, DeWalt is celebrating its 100th anniversary.
Among the headliners in the portfolio of Stanley Black & Decker, that's NYSC ticker symbol SWK, DeWalt's iconic black and gold pattern lines the shelves of stores all over the world. From Lowe's to Home Depot, that's NYSC ticker symbol HD, to Walmart, ticker symbol WMT, among many others in between, DeWalt's high-quality products are available to a wide variety of consumers.
At the helm of Stanley Black & Decker, and among the many celebrating with us today at 11 Wall Street is CEO, Donald Allan. Appointed to the position in 2022, Don leads Stanley Black & Decker's over 50,000 employees and its brands, including DeWalt. With over 25 years spent at the company, he joins us today, Inside the ICE House, to honor the past and to look towards the future. We will dive into the next 100 years for DeWalt and discuss the tradespeople and trades industry that Stanley Black & Decker is working to better. Our conversation on all that and more with Donald Allan, CEO of Stanley Black & Decker, is coming up right after this.
Audio:
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Lance Glinn:
Welcome back. Remember to subscribe wherever you listen, and rate and review us on Apple Podcasts so that others know where they can find us. Our guest today, Don Allan, is the president and CEO of Stanley Black & Decker, that's NYC ticker symbol SWK, and has led the company's over 50,000 employees and iconic brands for the past two years. He has spent the last 25 years with the company, joining in 1999, and has been instrumental in driving Stanley Black & Decker's growth and transformation strategy since his arrival. Connecticut born and raised, Don serves as Board Chair of Regents for the University of Hartford, his alma mater, and has a role on non-profit boards throughout the Nutmeg State and New England region. Don, thanks so much for joining us, Inside the ICE House. Welcome back to the New York Stock Exchange.
Donald Allan:
Thank you, it's great to be here today. It was a wonderful morning.
Lance Glinn:
So you are fresh off an NYSE bell ringing, celebrating the 100th anniversary of DeWalt, the company, since 1924, synonymous with the tools that have built our nation's homes, businesses, overall infrastructure. How meaningful is it for you to lead Stanley Black & Decker right now, as one of your iconic brands in DeWalt is celebrating this century milestone and commemorating it on the podium this morning?
Donald Allan:
Well, it's actually a very humbling experience to be part of this today, because when I reflect on what this company has created, Stanley Black & Decker, which has been around close to 180 years, we've created a lot of amazing brands, we've become a global company, but the thing that's really core and significant to us is the DeWalt brand and the innovation, the safety that we provide with these products, as well as the productivity on the job site. So to be associated with something like that just makes me feel incredibly proud, and it's very humbling to know that you're part of a company that's had this long of a legacy. But what's even more exciting is when I look forward and think about what we can do with the DeWalt brand and some of our other brands, it just gets me excited about the future, because there's so many things that we can do to make this brand even more powerful and more impactful to the end users that uses these products every single day.
Lance Glinn:
So let's talk about the future, right? And DeWalt, the 100th anniversary, on the DeWalt website, there was a video remembering the company's history, honoring it, while also looking towards the future. I want to take a listen to a quick clip from that video.
Audio:
Raymond DeWalt, his training began on the job site in Pennsylvania. He saw the opportunity to do more and to do it more efficiently, more safely. So he patented the Wonder-Worker saw. It revolutionized the job site, allowing pros to get better results faster. Since then, we've relentlessly charged ahead, from revolutionizing the electric job site, to advancing cordless tools, to developing full trade solutions. We'll always innovate to change the world, but we'll never change who we are.
Lance Glinn:
So from Raymond DeWalt's Wonder-Worker saw to the more modern and cordless 20V Max XR Dual Trigger Mid-Size Bandsaw, DeWalt, as you said in the video, has changed the world. What does the next 100 years look like for the iconic brand?
Donald Allan:
Well, I think you're going to see a lot of what we've been doing for the past 100 years, because when you step back and think about what Raymond DeWalt created 100 years ago is that he was looking for a tool that would be innovative. He was looking for something that was high quality and has a high level of safety, and he was also looking for something that would make the user be more productive. And when I think about this brand and what we do every single day today, those three core tenets are still in place and will be in place for the next 100 years. And so as we think about electrifying the job site, because one of the things we like to do is cut the cord on the job site, and so how do we migrate away from electric cord products? How do we migrate away from air compression products or even looking at, it has nothing to do with the core, but we're even looking at gas-powered products, and how do we electrify that through battery power?
And that's going to continue to happen over the next several decades. And more and more products will be quote/unquote "cut the cord" and will be electrified through battery-powered technology. I also think more and more of our tools will continue to be connected. And so how do we connect that and get data off that tool to see how well it's performing? Is the user getting the expected performance from it, the efficiency, the length of the battery? Does it last in the expectations that we have? All that type of data will allow us to continue to innovate in this space, but also help the end user recognize when certain things need to be repaired or changed within the tool as well. And then, artificial intelligence will have a role in the future with these products as well. It's difficult to know exactly what that role is going to be, but there's no doubt it'll be part of our future as well.
Lance Glinn:
Yeah, you can't avoid AI.
Donald Allan:
No.
Lance Glinn:
It's two of the most powerful letters right now in the world. So this anniversary celebration isn't confined to the walls of the New York Stock Exchange. How are you and your team extending the festivities beyond the bell ringing to honor the tradespeople, the people obviously so crucial to what Stanley Black & Decker does across Manhattan?
Donald Allan:
Well, we started the day today, we were up early and we went over to a job site, the J.P. Morgan building that's being constructed in Midtown, and in between shift changes, we were outside the construction site and we were serving all these workers coffee, breakfast, giving them some DeWalt swag, and talking to them about the power of DeWalt and what they love about DeWalt, and also making them aware that we were recognizing the 100-year anniversary of DeWalt. And it was just great to interact with these folks and get a sense of why they love our tools. And it's all the things that I described earlier, those three areas of innovation, productivity, and safety continues to resonate very strongly with these individuals. That's just what we're doing today, and we'll continue to do more of those activities as the day goes on here in New York City.
We've donated a significant amount of tools to trade schools here in New York City, so that those being educated in the trades can really learn how great our tools are. And they do have those three attributes that I described as well. And so they build a loyalty and alliance to the brand DeWalt, which is part of a much broader program that we've been doing for the last two or three years, where we really are looking to grow the trades. The trades deficit is significant in this country. It's significant globally, but if we just focus on the United States, half a million dollar jobs are open, I'm sorry, half a million different jobs are open in this country, where there's a need for some type of trades worker, a plumber, an electrician, et cetera.
And so we are trying to fund different trade schools across the country to do very similar to what I described for New York City. And so we committed $30 million over a five-year time horizon. We're more than a third, 40% of our way into that. And I imagine when those five years are up, we'll be looking to commit more, because this is an important part of really not only building loyalty to the DeWalt brand, but helping them realize how much better our products are versus our competitors'.
Lance Glinn:
Why do you think we have that 500,000 job deficit when it comes to the trades? I know a lot of Baby Boomers are retiring, or nearing retirement, or getting to that age, so why do you think workers sort of my age, I'm 28 years old, have kind of been steered away from the trades and aren't there to fill that half a million job deficit?
Donald Allan:
I think a lot of people have been excited about different areas of expertise that have emerged over the last 20 years, and data analytics and a lot of different things. There's other jobs that you can get through an Amazon warehouse, through DoorDash, through et cetera, et cetera, that you're delivering a variety of different things. So the spectrum of opportunities is pretty broad, but one of the things that I think folks don't realize is that you can build a really amazing career and profession by becoming a plumber, or an electrician, or a construction worker, and you can build an expertise that's very unique. And if you just think about yourself, most of us do not have that ability to rewire a house or to construct a house.
Lance Glinn:
I certainly don't.
Donald Allan:
Or replumb it, build plumbing. I mean, it's a very unique expertise that I think folks have kind of lost the fact that this is an amazing career that you can build doing that, and you can build some nice wealth, and you can build a nice career for your family. And I think we need to educate people as to why this can be such an amazing career path for some of our younger folks.
Lance Glinn:
So before we dive really into the significance of tradespeople and preparing the trades for the future, let's explore your journey within the company. You've spent the past 25 years in various roles, including your position now as President and CEO. Were there any personal experiences, or like so many, a first minimum wage construction job that sort of sparked your interest in the industry, and got you interested, and enticed with Stanley Black & Decker? I guess when you started, Stanley Works?
Donald Allan:
I started my career very young, and I wouldn't even call it a career, where I was working on a farm, picking tobacco when I was like 13, 14 years old. And I knew I didn't want to do that. So then, I started, as I got into a 18, 19, 20-year-old, I started working on construction job sites, and I learned how to do certain things on that job site. I would never label myself as a professional construction worker, but I really learned how those professional individuals were just so good at their craft.
Lance Glinn:
Were you using DeWalt tools?
Donald Allan:
I don't remember, but I'm going to say yes.
Lance Glinn:
Got it.
Donald Allan:
But I really built an affection for like, "Wow, these skilled tradespeople, really doing something very unique and special." And then I went off to college, and I got a business degree, an accounting degree, and I did accounting for a period of time at a large accounting firm. But at that large accounting firm, I actually audited Stanley Works at the time, and it made me realize what a great company that was. And eventually, five, six, seven years later, I had an opportunity to come to Stanley Works, and we became Stanley Black & Decker 12, 13 years after that. And it's just been an amazing experience, but I think the actual experience of me being on a job site made me recognize how skillful these trades folks are.
Lance Glinn:
So you talk about Stanley Works acquiring Black & Decker, that happened in 2010, and in that process, incorporating DeWalt. Additionally, over the past decades, brands like Craftsman, Lenox, Irwin have joined the family as well. Considering all your years in the company, how has Stanley Black & Decker transformed and expanded in tandem with obviously your personal growth?
Donald Allan:
Yeah, I think that one of the things that we collectively, as a leadership team, started in the early 2000s was we loved our tools business, and it was primarily the Stanley brand back then. But we also recognized that it was not a very diverse portfolio of products and brands, because Stanley brand is primarily tape measures, screwdrivers, hammers, et cetera, levels. And we needed to get ourselves more into the power tool space, where a lot of the innovation and productivity can be driven that really allows you to differentiate yourself.
And I think the Stanley company did a great job in that time horizon leading up to the early 2000s of differentiating in some of the products I mentioned. But you can really differentiate yourself with power tools, and you can also really demonstrate productivity in a significant way on that job site. So by putting those two companies together, we created the best and biggest tool company in the world.
And we built upon that through the Craftsman acquisition, which goes more to trades people and do-it-yourselfers; Lenox brand, which is a very pro-oriented brand around saw blades; and then the Irwin brand, which is a bit of a tradesperson brand as well. And then, we have all these other niche brands that people don't hear about as much, like Mac Tools, and a French brand called Facom, Proto brand, and those are all mechanics tools that are used by auto mechanics or an engineer within a manufacturing plant.
And so our goal was really how do we create the biggest and best tool company in the world that's a combination of hand tools, power tools, and outdoor product? And that's really the mission we've been on. And my two years as CEO, I've really focused, or narrowed our focus to those areas, and we've sold off some other businesses that are not tied to the tools and outdoor business, to ensure we're focused on really driving the amazing power of these brands and the innovation we have, to demonstrate significant outgrowth versus the market.
Lance Glinn:
And how do you make sure, you mentioned all these brands, Craftsman, DeWalt, Lenox, Irwin, you mentioned Mac Tools, how do you make sure they don't cannibalize each other internally? How do you separate them?
Donald Allan:
That's a great question, and something that you have to be very focused on, ensuring that you don't do that. And it starts with a premium brand like DeWalt at the top of the house. The next brands, like a Craftsman, Stanley, they're more focused on the trades, which is like a notch down from the high-level pro. Maybe a little bit overlap there, but not a lot. And then, you have brands like Black & Decker, which is very consumer-oriented. And then, you have niche brands that are more in specific areas of a professional, like I mentioned with Lenox, and Facom, and Mac Tools that go down the path of more of a automotive repair worker or a manufacturing engineer. And so you have to really build a brand architecture that says, "Okay, here's the channels of these brands and the users we're really targeting," and you do everything in your power to really minimize the overlap.
Lance Glinn:
So, look, full disclosure, I own DeWalt tools. I use them very rarely, because I am someone who uses tools when there's an problem in my apartment, when I have to screw something in or put together a table. But of course, there's so many segments of the tool market, I guess we could call it: You have the tradespeople, you have the DIYers, you have people like myself. So how do you market and innovate to all these different segments? Because, look, ultimately, I use my tools every so often, but when I go out and buy my next set of tools, I ultimately want to make sure that what I am buying is up-to-date, is new. So how do you make sure that you're innovating to me, as well as the tradespeople, as well as the DIYers?
Donald Allan:
Well, actually, we're fortunate where we can do that based on the brands: So what we try to do is organize around the large brands that we have, in particular, DeWalt, Craftsman, and Stanley. And DeWalt obviously is focused very much on that high-end, premium, pro. And so all the innovations that we're bringing are really about those three things of innovation, safety, and productivity on the job site. And everything that we do around cutting the cord or bringing a new product to the market has one, or two, or three of those pillars in place. When you think about the tradesperson, which is more of a Stanley brand or a Craftsman brand, they don't need the same high-level functionality that a pro needs, but they still need the high quality and the productivity that comes with it. So you actually look at that and say, "Okay, there's two or three different things that I need here that appeals to someone in the trades."
And so an example would be a plumber, an electrician are working in relatively small spaces. And so how do you provide them smaller yet powerful tools so they can work within those spaces versus a very large, powerful DeWalt tool? And then, there's obviously the consumer, or a brand like Black & Decker in particular, but even Craftsman can resonate with a consumer, and you want to have the right functionality that appeals to the consumer. Where somebody might use the Black & Decker tool two times a year, you want to make sure that it works when those two times are used, the product.
Lance Glinn:
And I will say, mine do work.
Donald Allan:
Yes.
Lance Glinn:
So far, so good. So I want to talk about the tradespeople, and DeWalt's Grow the Trades Grant Program is making a $30 million commitment over five years to support organizations that are skilling, re-skilling, and up-skilling tradespeople. How is the company, through this program, contributing to initiatives that foster growth, opportunity, and proficiency among those tradespeople?
Donald Allan:
Yeah, I think the first place you have to start with is identify the more significant, powerful trade schools in the country that are educating these individuals on how to do these variety of trades, like plumbing and electricians, as I mentioned, and professional construction workers? And then, provide them tools that they can utilize so they can learn why DeWalt is better, the best product out there for their use or their expertise. That's really the first thing that you do, because what it does is it builds a brand loyalty, but what it also builds is like, "Wow, these tools can do things that other competitor tools can't." And as you continue to bring more innovation to the market, you can continue to demonstrate that.
The other thing is quality and safety: Is it a high quality product that will last for eternity, but yet it's very safe to use, and there's not any danger to the end user? And I think that's incredibly important to educate these individuals as to those attributes related to DeWalt. So you really have to build that foundation at what we call the ground level, and building, as new people come into the trades, help them understand why we're so unique and special.
Lance Glinn:
And how are you introducing military veterans and those coming back from combat to the trades? How are you helping to fill that 500,000-person deficit or job deficit with people that are coming back into civilian life?
Donald Allan:
Yeah, I mean, we have an employee resource group in the company that is very much focused on veterans. And so one of the things that we're trying to work with that group is how do we get ourselves to a point where, as folks come back from either overseas in a military assignment or just a general military assignment, and they go into the workforce, get them to realize that these trades are a great opportunity to really build a career? And so as we do that, it's a slow ground game. It's not something that happens overnight, and you have to invest a little bit of time and effort into it. But it's a great opportunity for folks that have gone through the military experience, maybe are not ready to be an office worker, but look at the trades as an opportunity to build a home, and build a family, and build a great profession.
Lance Glinn:
So in January, the company electrified the Vegas skyline, taking over the Sphere, that's NYC ticker symbol SPHR, to support the launch of DeWalt Powershift.
Donald Allan:
Yeah.
Lance Glinn:
How is Powershift helping Stanley Black & Decker and DeWalt meet the needs of concrete professionals?
Donald Allan:
Yeah, so back in January, there's a convention out there called the World of Concrete, and so that was the week when that convention was going on, and we had all kinds of outdoor tents set up to demonstrate the power of Powershift, which is another example of us cutting the cord and using battery technology for very powerful tools that are used to apply concrete, cut concrete, and also do other aspects around construction associated with concrete.
And so we were able to have the Sphere with the DeWalt Powershift brand on it for multiple days, as we were launching that new innovation to the marketplace. And we had an amazing reception from the professionals that were there using the tools, and just were in shock at how powerful the tools were. And they actually seemed to be, in their minds, the words were, "These are performing better than a corded tool performs," and they last longer in the sense of the battery technology of what they've seen with other types of competitive product. So it was a great launch for that product, and it's something that is another example of how we continue to try to bring amazing innovation to the marketplace.
Lance Glinn:
I want to quickly pivot to EVs, and on Stanley Black & Decker's you wrote, quote, "The auto industry is shifting faster and faster away from gas engines to electric vehicles. We need to be a part of that solution, just as we're driving hard at the electrification strategy of our outdoor business." So you say you need to be a part of it, what steps are you taking to be included in the solution and shift from gas to EVs?
Donald Allan:
Yeah, so we have a business that we don't talk as much about externally, it's called Engineered Fastening. And what it is it provides fasteners, but also the machines to apply the fasteners in a variety of different manufacturing settings. But one of those settings is automotive production. And so for years, we've been providing fasteners that put together cars that are run on gas technology. And about 10 years ago, as the electric vehicle market began to come on the scene in a more significant way, we said we need to be with these EV producers as well. And so we've come up with fasteners and fastening machines that not only put the car together with studs, and bolts, and rivets, it also has a variety of different types of clips in there that are holding the wiring together, and the technology around electric car.
And what's interesting, since we've been doing this for so long, we refer to something called content, like how much content do we get in the car? It's like an X number of dollars. So a typical gas combustion car will probably have $4 to $5 of content in each individual car. An electric car, we can have anywhere from $10 to $30 of content, because of the sophisticated technology, and wiring, and other aspects that are in that car that we can apply our fasteners to. So we're well positioned for that shift, and it probably will take a long time for us to migrate in the United States to more electric vehicles, but as we migrate, the company is perfectly well positioned.
Lance Glinn:
So Don, as we begin to wrap up, we obviously talked about the trades industry and tradespeople earlier in the conversation. As you get set to visit many of those, and you already have visited some earlier this morning, are you optimistic that the trades industry, we talked about the 500,000 job deficit, are you optimistic about the future of the trades industry and that it will see, I guess, sort of a resurgence or a rebound of sorts, and start filling those 500,000 jobs?
Donald Allan:
I am optimistic, and the reason I'm optimistic is not just because of what we're doing, but when I look around to our customers within the United States, and even some of our competitors, we're all doing it, and we recognize that we should all do this together, and really have a significant impact to get more and more people into the trades, because everybody recognizes it's a huge deficit that will actually impact growth over the long term. And the opportunity in the construction industry for growth is quite significant.
Housing is we don't have enough housing in the United States, and so we need to build more homes, we need to build more apartment complexes, and to do that, we need more professionals in the trades, and otherwise we're going to continue to deal with shortages of housing and challenges, and I just don't think that's how it's going to play out. I think it's going to play out where we get more and more excitement, and people see careers in this space, and they can be part of building a home, building a data center, building a big office building in a major city like New York, and really build a successful career from that.
Lance Glinn:
So as our conversation began, we spoke to the future of DeWalt in the next 100 years. Stanley Works now Stanley Black & Decker, has been around for 180. So what's in store as the 200-year anniversary, believe it or not, is less than 20 years away, less than two decades. It'll be here before we know it, Don, what's in store for the future of Stanley Black & Decker?
Donald Allan:
I think it's more of the same: I mean, I think there's opportunities to continue to build upon what we have, and we have an amazing suite of brands, we have a great innovation machine, and we have wonderful people. And those three things have really what made this successful company churn for 180 years, and be at the top in many different categories that we serve. That's what's going to make us successful going forward for the next 20 years.
Lance Glinn:
When you do turn 200, we'd love to have you on, once again, Inside the ICE House. Don, thanks so much for joining us.
Donald Allan:
Thank you, I really appreciate the time.
Lance Glinn:
That's our conversation for this week. Our guest was Donald Allan, CEO of Stanley Black & Decker, that's NYC ticker symbol SWK. If you like what you heard, please rate us on Apple Podcasts so other folks know where to find us. Got a comment or question you'd like one of our experts to attack on a future show, make sure to leave a review. Email us at icehouse@icecom or tweet at us @ICEhousePodcast. For Josh King, P-Dash, and Ken Abel, I am Lance Glinn. Thanks so much for listening, we'll talk to you again next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly-available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length of clarity.
