Family businesses don’t have the best reputations anymore. When it comes to Samuel, Son & Co., they haven’t lasted this long despite being family-owned, but because of it
CEO Colin Osborne, Samuel Son & CO Phillip Chin/The Globe and Mail
Karen Fenton joined Samuel, Son & Co. in 2008 and almost felt like she’d slipped back in time to the mid-1970s. The head office was filled with workers in blue suits and ties. Layers of management were stacked atop one another like sediment on a cliff face, while the company president stood at the summit and made most of the decisions. The human resources department, where Fenton worked, was not viewed as a partner within the organization, but more like a kid sibling to be kept busy with perfunctory tasks. She was only there because Samuel had purchased her employer, a processor of flat-rolled metal products, and she didn’t know if she wanted to stay.
But Fenton did stay, and earlier this year she was appointed chief people officer of Samuel, an industrial manufacturer and metals company. In the nearly 15 years since, she’s witnessed and participated in its transformation—Samuel is less hierarchical, it moves faster, and more employees can make their own decisions. “It’s a world away from where we were before,” she says. Fenton is careful not to criticize too much. “That’s not to say we were in a bad place,” she clarifies. After all, Samuel has existed for longer than Canada has been a country. Clearly, it’s been doing a lot of things right. It’s just that when a company is 167 years old, some refreshing can be in order.
Founded by the brothers Samuel in 1855, the firm is one of those unglamourous and unsung industrial stalwarts that flies below the radar while wielding a sizable presence. Samuel, based in Oakville, Ont., employs about 5,500 people in Canada, the U.S. and Mexico. It has around 85 facilities—at least one in every province, six in Mexico, and more than 40 in the U.S. At any given time, some two million tons of metal are coursing through its operations, servicing customers in industries spanning automotive, aerospace, defence and construction.
It does just about everything you can think of with steel and aluminum. Samuel will polish it, pickle it, shape it, or flatten it to a level plane. It churns out parts for electric vehicle manufacturers; uncoupling levers for rail cars; sub-assemblies for aircraft; aluminum extrusions for windows, doors and RVs; tanks and pressure vessels for oil and gas storage; and custom components loaded on to satellites and blasted into space. You get the picture—unexciting fabricated components and industrial services without which many businesses could not function. Oh, it also has a printing and labelling group, and a transportation and logistics company tucked in there.
The son of Lewis Samuel, Sigmund.
Samuel has proven adept at forecasting industrial trends and placing smart bets. Its biggest customer, for example, is Tesla—not just in its automotive group, but overall. Samuel now churns out aluminum panels that later get turned into doors, roofs and hoods for other electric vehicle makers, including Rivian, Lucid, BMW and Toyota.
Sigmund's grandson Ernie, who set up Sam-Son farm
It adds up to a conglomerate that generates about $5 billion in annual revenue. “It’s one of the most complex makeups of an industrial company of its size that I’ve ever seen,” says Colin Osborne, Samuel’s president and CEO. Osborne is only the sixth CEO in the company’s long history. For much of its existence, Samuel has been run day-to-day by an actual Samuel, and its first non-family CEO was only appointed in 2000. The company is still family-owned, now by the fifth generation of Samuels, who have ranked among the wealthiest families in Canada. (Their net worth was estimated at $1.6 billion in 2016.)
Family businesses don’t have the best reputations these days. The stereotype is that they are riven with jealousy, animosity and petty squabbling. Recall the turmoil at Rogers Communications Inc. last year, which pitted chair Edward Rogers against his mother and his sisters, and led to a bizarre situation in which two rival boards of directors claimed authority over the telecom firm.
Samuel hasn’t lasted this long despite being family-owned, but because of it. The stability and long-term view that family ownership can bring has enabled Samuel to do things that a publicly held corporation might have a harder time justifying to shareholders, even if its corporate culture has lagged until more recently. On that front, Osborne says it’s a little ironic Samuel has been named one of Canada’s Best Managed Companies: “What I’m really trying to do is manage less.”
Today, Samuel, Son & Co. has three equal owners: siblings Mark and Kim Samuel, and Rick Balaz, a retired Samuel executive who was married to their sister, Tammy. In 2008, Tammy died of cancer, and her stake went to Balaz. The three do get along, in case you were wondering. “It’s really important that we respect each other,” says Kim, 62. “That doesn’t mean we don’t have disagreements, either. That’s one of the responsibilities, to make sure that your differences never get in the way of the business.”
That business began with her great-great-grandfather and his brother, Lewis and Mark Samuel, who left Britain and set up shop in what’s now downtown Toronto in 1855 to import and export steel. The company, M&L Samuel, was eventually taken over by Lewis’s son, Sigmund, who renamed it Samuel, Son & Co. and opened a branch in Montreal.
By the early 1960s, Samuel was a $6-million company that primarily housed and distributed steel. Sigmund died in 1962, and his grandson Ernie took over. He wasn’t born a Samuel—he was a Willinsky, after his father. Ernie’s parents divorced when he was young, and he and his mother moved in with Sigmund. He asked his grandson to legally assume the Samuel name, and after graduating from the engineering program at the University of Toronto, Ernie joined the company.
A tall, debonair man with the uncanny ability to recall everybody’s name, Ernie took Samuel in new directions. He started a packaging business, a transportation arm (he named it Kim-Tam, after his daughters) and branched into manufacturing, a division that was later spun off into a publicly traded company called Samuel Manu-Tech in 1985. (It was brought back in-house in 2010.) Aside from business, Ernie was fanatical about horses and set up a prestigious training and breeding operation called Sam-Son Farm, with outposts in Ontario and Florida. On race days, Ernie could be spotted in a cowboy hat, surveying the track with binoculars.
The fifth generation Mark Samuel
Ernie suffered a severe brain injury in 1997 and fell into a coma for three months. Though he recovered, he had to step back. In 2000, his wife, Elizabeth, became chair of Samuel, and the company appointed its first outside CEO. Mark, meanwhile, became CEO of the publicly traded manufacturing company. Ernie died of cancer that same year at age 69.
Tammy took over the horse farm, and in 2006, Mark became chair of the company. Kim, meanwhile, was already running the family’s charitable foundation. Growing up, she was never expected to go into the business. “It’s always bugged me a bit that there was not an expectation,” she says, adding she believes it was partly because of her gender. Kim worked at Samuel during the summers while studying geography at U of T, and later in trade negotiations during the drafting of the North American Free Trade Agreement. She returned to Samuel to develop an environmental compliance and sustainability structure before taking over the foundation. (In 2017, she founded the Samuel Centre for Social Connectedness, a non-profit focused on overcoming social isolation.)
Mark also worked at Samuel from a young age and then set off to complete a degree in history and literature at Harvard University. His plan was to take a job in management consulting before pursuing an MBA, but when Ernie suffered a mild heart attack in 1986, Mark returned to Canada to work for the family firm. He never left, taking on increasingly senior positions. In 2006, he became chair of the parent firm, overseeing a period in which Samuel expanded in Mexico, weathered a recession and branched into new areas of manufacturing.
Importantly, all three owners have been willing to let outside professional managers do their jobs. Mark, for example, was CEO of Samuel Manu-Tech when the parent company privatized it in 2010. After the transaction, “there was only room for one senior management team and one CEO,” Mark recalled over email. He was content to let Samuel’s then-CEO, Wayne Bassett, continue running things, while he focused on being executive chair. Similarly, after Samuel brought in a new CEO, Rick Balaz felt it was time to retire in 2015. “He wanted to make a number of changes, and I sort of felt like I was in the way,” Balaz says. “I think it was best for the company.”
In recent years, Samuel has implemented governance structures to strengthen the business. Kim advocated for a board with independent directors after Ernie died and ensured they had votes. “I pushed hard within my family that we should have independent directors because it would be good for the business,” Kim says. “There wasn’t really a reason we hadn’t had it before. It just had never really come up.”
That Samuel has carried on to the fifth generation is impressive, even if the fragility of family dynasties is perhaps more myth than reality. Take, for example, the third-generation curse, which refers to the grandkids’ unique ability to squander their legacy. An article in the Harvard Business Review argued the concept was popularized by a single study from the 1980s, which found only a third of family businesses made it through the second generation. The study focused exclusively on manufacturing companies in Illinois and did not compare family-owned businesses to other kinds of companies. A different study, published in the journal Royal Society, examined publicly traded firms between 1950 and 2009, and found companies had a half-life of just 10 years, which barely amounts to a generation. Meanwhile, a 2018 study by Credit Suisse found that family-owned firms grow faster and generate better margins than their peers.
What research has generally shown is that family-owned companies have a long-term view and avoid rash moves for a quick payoff. That’s something Colin Osborne saw first-hand when he joined Samuel.
An engineering graduate from McGill University, Osborne has always worked in the steel industry, including a stint as COO at Stelco. He was recruited as president of Samuel in 2015, with the agreement that he would also later be its CEO. (He was appointed to that role in 2019.)
Osborne then embarked on an odyssey to learn the ins and outs of the sprawling conglomerate, overseeing all three major divisions (automotive, manufacturing and its metals service centre), visiting every facility and meeting with employees. “When you get to the role of trying to figure out strategy and capital allocation and all those other things, it’s not easy unless you understand the product and the end market,” he says.
Osborne had two main goals when he joined: set up the company’s assets for the long term and update the corporate culture. On the first point, Samuel had made many acquisitions over the years, some more opportunistic than strategic. Taking a hard look at the portfolio and determining where to focus time and money was a necessary task.
He’s pushed heavily into aluminum, and Samuel recently decided to invest $85 million to build an extrusion facility in Mexico, across the border from an existing plant. That’s on top of a new aluminum plant in Tennessee it opened in 2015 and upgrades to another in Brantford, Ont., a few years later. Both the rapidly growing solar and electric vehicle industries are craving aluminum; in the case of EVs, the metal is lighter than steel, helping to compensate for the added weight of batteries. Samuel formally began its relationship with Tesla in 2017, and Osborne gives the credit to the company’s automotive team. “People in our automotive group were quite prescient, like, we see this shift from steel to aluminum, and we need to position ourselves appropriately,” Osborne says. Demand for aluminum is so strong that Samuel’s sales have surged between 500% and 600% in the past few years.
The company has also branched into additive manufacturing, which is kind of like manufacturing in reverse. Instead of starting with a hunk of metal and whittling away at it, additive manufacturing uses specialized machines that build custom parts from powder. To enter the field, Samuel invested in a local company called Burloak Technologies in 2017 and bought the whole thing three years later. So far, Samuel has built custom parts for satellites, turbines and the nuclear industry. Osborne views it as a disruptive technology—it can produce parts that are virtually impossible to make through other means, it shortens supply chains, and it results in less waste. “The view of the owners was, let’s invest in it,” Osborne says.
Such investments are made with a long-term view; the plant in Tennessee, for example, wouldn’t be profitable for years. That’s one of the advantages of working for Samuel, Osborne says. “I never hear people talking about quarterly results.”
Company culture was his other major priority. Samuel had already changed for the better over the years. Karen Fenton, in her role in the HR department, pushed hiring managers to consider job candidates who had outside experience—not just, say, experience in the steel industry. When it came to promotions, Samuel reflexively favoured employees with tenure, as opposed to newer workers who might be more deserving. “Over time, we’ve gotten people to understand that concept and then see the value of bringing great new people in,” she says.
CEO Colin Osborne, Samuel Son & CO Phillip Chin/The Globe and Mail
Osborne pushed the company toward a more decentralized management structure. He’s a big proponent of empowering employees to make decisions. While taking courses at Harvard Business School, he came across a case study about Fred Smith, the founder and CEO of FedEx. “He would tell a story about why FedEx is so agile. If a snowstorm shuts down Chicago, you don’t need to have a meeting with a bunch of executives,” he says. “The people at the ground level, they understand the intent, which is to get a package there tomorrow.”
At Samuel, Osborne wants employees closest to the problem to be making the decisions, a message he keeps reinforcing within the company. About 120 Samuel managers have also attended Thayer Leadership programs at West Point Military Academy to upgrade their skills. “You get to critical mass,” he says. “Once you get that happening and people start acting that way, it just builds huge momentum.” Osborne has seen the results—such as when then U.S. president Donald Trump slapped tariffs on Canadian steel and aluminum in 2018. Samuel pushed decision-making down to each plant and reorganized its supply chain in a few short weeks to mitigate the impact.
Osborne keeps bureaucracy to a minimum and stays updated through a weekly one-hour meeting with senior leaders. He also prepares a separate monthly report for the owners and board. It would be unusual to go a week without getting a phone call from at least one member of the Samuel family, asking about some aspect of the business. “They’re very engaged but very happy to leave management to us,” Osborne says.
Mark, 58, retired from the board in 2019, and Samuel appointed its first non-family chair. By then, Mark had other priorities: a young family and his role as vice-president of the International Equestrian Federation. (Mark is an accomplished show jumper himself.)
Lately, the three of them have been turning their attention to the future. There are seven family members in the sixth generation, ranging in age from 10 to 30. None are currently employed at Samuel, though Balaz’s daughter did work in the marketing division for a time. “That’s probably an area where we are weak, and we do have to be more focused on bringing the next generation along,” Balaz says. That entails learning about Samuel and understanding their role as future owners.
Looking ahead also forced the family to make a difficult decision. Sam-Son Farm, the horse breeding operation, has always been an odd fit with a steel company. When Ernie started it in 1972, he made it part of the parent firm, rather than hive it off as a separate entity. With both Ernie and Tammy no longer around to tend to it, the farm became even more of an outlier. In 2020, the family decided to disperse its breeding and racing stock, with the intent to wind down operations completely. “Anything we can do to tie up loose ends while we’re still able to is a good thing—to be able to hand over a much cleaner business to the kids when the time comes,” Balaz says.
History always looms large with Samuel, but it has to keep looking ahead, just as it’s done for the past 167 years.
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