Leather

A Conversation with Shep Hermann

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Hermann Oak Leather’s chief executive shares knowledge and wisdom gained from his long years of running the tannery

By Lynn Ascrizzi

It takes a certain kind of resilience, know-how and stick-to-itiveness to run a successful business long-term, especially a four-generation, family-run tannery like Hermann Oak Leather, located in St. Louis, Missouri.

All this became evident during a conversation with company president and CEO, Shep Hermann. He shared some hard-earned knowledge gained from his long experience working at the monolithic, three-story, red brick tannery, that during well over a century has become a prominent landmark in the city’s commercial district — a business which has made an indelible and seemingly destined impact on his life since he was a kid.

He first joined the company in 1985, the fourth Hermann to do so in an unbroken line of Hermanns. It all began with Louis Charles Hermann, who in the late 19th century, apprenticed in a small tannery in St. Louis.  He founded Herman Oak Leather to supply the busy local harness trade and the mass migration of settlers heading west on wagon trains. His goal was to produce, in his words, “upper, harness and sole leather.” He incorporated the company in 1881, located in a facility on North First Street, about a stone’s throw away from the Mississippi River. The tannery is based in the same location today.

In 1907, his son, Fred Herman Sr., joined the company. During his era, the tannery supplied leather for U.S. soldiers throughout WWI and WWII. Then in 1948, his son, Fred Herman Jr., came on board.

Over its 137-year history, the tannery has weathered depressions and recessions, two 19th-century fires, two world wars, the closing and/or offshoring of hundreds of U.S. tanneries, which began in the1970s, increasingly strict U.S. environmental regulations and countless other pressures…all the while, maintaining a world-class level of excellence.

Hermann Oak specializes in producing traditionally crafted, vegetable-tanned leather for the equine industries and for consumer goods, like holsters and handbags.  The process, which uses an old-time tanning method, is an extremely complex and demanding undertaking.

“We have 10 different kinds of leather, each using 100 chemicals and 1,000 individual steps with 10,000 chemical interactions,” Shep Hermann explained, emphasizing the company’s strict quality control, in which all steps are recorded and signed. Leathers produced include skirting, harness, bridle, strap, tooling and carving leathers as well as holster, Sierra latigo, dry-milled luggage, rawhide and miscellaneous leathers.

During a recent talk with Hermann, 65, it became apparent that he is not one to dwell much on status or accolades. When asked for his company title, for instance, he politely quipped: “In my book, titles have little meaning.”

It is not surprising then, that one of his core goals is being of service, to customers and to neighbors alike. This attitude reflects in his goal to produce the highest quality veg-tan leather possible and in his involvement with community service projects, like Grace Hill Settlement House, “a nearby philanthropic organization that serves local people,” he said.

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The following are conversation highlights:

Q: What was it like to grow up with the family business? Did you work for the tannery while in high school?

A: “I had the toughest, most demanding boss you can imagine, who set the bar the highest,” Hermann said, referring to his late father, Fred Hermann Jr., who passed away in 2015.  “I got to do the worst jobs there. At age 8, I got to stuff envelopes with business letters. I learned what boredom was. At age 12, I was cleaning off the skylights on the (tannery) roof in July. I got a taste of what it’s like to work when it was ‘warm.’”

“It was great training. All this folderol about giving children self-esteem. You cannot give anyone self-esteem. You have to earn it. You learn it by being given a task and fulfilling that task.”

“People who grow up on the land from an early age, grow up more wholesome. You have to have determination. Look at Navy Seals and Marines. The majority are from rural areas. They had the best teacher around — Mother Nature. She takes no prisoners. You cannot cheat her or lie to her.  That’s how you learn self- determination and self-respect and responsibility.”

“There is no way I’d be running this company, if I hadn’t been challenged back then. When I was 16, I was cleaning out 30-foot-deep sump pumps. When 18, I was spending all-nighters with consultants, working on the liming or unhairing process that is the first part of the tanning process.”

“I went to college, Princeton, and graduated with a degree in engineering in 1975. After college, I worked in three different cities for about 10 years, during which time I went to business school. But it was always my dream to work at Hermann Oak.”

“Around then, there were too many relatives in the company. There were too many owners. I was not working in the company, at that time. My father was very much involved and bought out all the inactive stockholders. They tend to suck money out of companies. When my father bought out his siblings, I went to work with the company. I didn’t want to work in a place where I couldn’t control my own destiny.”

Q: What did you learn from your dad, Fred Hermann Jr.?

A: “What I learned from him was to treat people as you would like to be treated.”

Q: What’s new at the tannery, in terms of technology?

A: “Our chemical tanning process is still very traditional, still what it was 100 years ago. All of our competitors have gone over to newer processes. Chrome leather has really taken off since the early 1900s. Now, chrome comprises over 95 percent of all leathers used in the world.”

“When you’re looking at newer technology, you’re looking at replacing old machinery with new machinery. Old tanning machinery was manufactured as far back as 1904. New machinery was designed within the last 20 years.”

“Our strategy is to keep our traditional tannage, while investing in modern equipment. We’re replacing the last of the 1900’s-built pieces of equipment this year.  And, we’ve adapted an existing piece of equipment for our particular use, for a scudding machine.”

“Nowadays, new leather industry machinery is mostly manufactured in Italy. The leather industry over there is considered a national, strategic industry. Because of that, they have traditionally supported their tanners with very aggressive depreciation schedules, which then let their tanneries buy new machinery every five years. The machinery comes from local, Italian manufacturers, which can advance the technology because of higher sales. The German and French machine industry declined because the government didn’t support them.”

“In the long-term, however, the Italian leather industry is struggling like all of us, against competition in China, which now produces half the leather in the world. It’s the same reason Russia collapsed. Planned economies don’t work. Capitalism is tough. It allows the economy to gradually shift from old line to new line economics.”

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Q: This November issue of ShopTalk! seeks to honor U.S. veterans. Are there veterans in the tannery’s history, or other ways the company has served the country?

A: “My father was in WWII. He enlisted. He interrupted his college career to join the (U.S.) Army at age 19. He was in the mechanics division of (Gen. George S.) Patton’s army. Basically, from my observation, that generation grew up quickly. They became mature adults at a very young age.”

“He had some scrapes. He was not in the infantry, but was an advanced scout, going into a town before it was liberated, in Germany.  He also was one of the soldiers who liberated one of the German concentration camps. He served two years, before the Armistice. Then, he finished up college. About 10 years ago, he met a man — one of the inmates whom he had helped liberate from the camp.”

“During WWI, there was a strong demand for leather. It was fought with horse-drawn cannons and there was a large demand for donkeys, mules and horses, harness, boots and knapsacks. This was pre-plastic days.”

“At that time, leather was a strategic commodity. The Federal government would stockpile leather and the raw materials used to make leather, like all the tanning chemicals. My grandfather would go to Washington D.C. and meet with government officials in the War Department to find out how much leather was being produced and how much the government would need. Basically, companies were pulling together to fight a war.”

“WWII was a mechanized war. There was a large need for boot leather. But we were not in that business. We were still in the harness business. We supplied a fraction of the leather that we had supplied in WWI.”

Q: How would you describe the veg-tan process and the leather you produce?

A: “We still are using a traditional, 100-year-old tanning chemistry. Everybody else has switched to a 50-year or to a 30-year process. We use no salts. We do not pickle our leather with salts. Most other veg-tanned leather is made using a pickle, which is a salt-acid bath. We do not do this, as salts will change the character of our leather.”

“The basis for our veg-tan is tree bark. We use quebracho, a tree from Argentina, and wattle, from Africa. Our leather is firmer; it holds its shape longer and keeps its mahogany color over its lifetime. It oils up to be a much nicer, richer color. Some chrome leathers are re-tanned with a veg-tan process, but they only get halfway to the richness of veg-tan leather.”

Q: Where do you source your hides?

A: “In the Midwest, from major meat packers. We buy jumbo native beef steers. That’s a steady diet for us. Their leather is the largest and the thickest, and they’re not branded.”

Q: What has the hide market been like these past three years?

A:  “It has been quite stable. The past eight years saw a huge run-up during the ‘China Decade.’ Then, there was a crash. China had been growing very rapidly. They were buying up all this raw material and putting a big demand on all commodities — oil, gas, corn, copper, cement — you name it.”

“Now, China is slowing down. The marketplace has caught up. People planted more cornfields and are mining more copper. It’s the way capitalism works. When prices signal that we want more, entrepreneurs plant more and frack more. In a short period of time, the world produced more commodities than it did before. Things are much more stable now.”

Q: How are sales?

A: “Very steady, very consistent – 10 percent of sales are overseas, and the rest is in North America.”

Q: How is the tannery dealing with stringent, U.S. environmental regulations?

A: “The regulations are gradually tightening up — not nearly so much as had happened in the 1970s, where environmental regulations hit the fan. Nowadays, it’s a gradual change. We’re dealing now with Proposition 65,” (administered by CAL/EPA’s California Office of Environmental Health Hazard Assessment or OEHHA.) *

“We’re in phase two of that, in terms of all chemical use for leather. Anybody who ships anything into California has to adopt this regulation.”

“We strive diligently to comply with all environmental laws and regulations, both national and local. Most of U.S. tanners have closed or moved to countries with little or no environmental controls or costs. We have not, choosing instead to produce in the U.S. while complying with our laws.”

“Environmental costs amount to about 5 to 10 percent of the cost of making leather. As long as our end user finds value in what we are producing, then we will be able to cover this cost. We’re on the high end of the quality curve that people are willing to pay for. As a niche player, you can do that. Our entire industry is niche — like the saddle and the holster markets.”

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Q: How large is your workforce?

A: “We have 75 employees. We strive to provide an exceptional place to work. That’s the culture. We give a good wage — $17 to $18 per hour, plus health care and a 401(k). We hold health fairs to check blood pressures, and other benefits. People are treated with respect and invited into the decision-making apparatus of the company.”

“Most of our employees are minorities. We are very blessed to have a wonderful group of people here, making a very high-quality product. It’s phenomenal to feel this when we walk through the company. That’s what I consider, now, my most vital community service.”

Q: Are you planning to retire, any time soon?

A: “We’re training young people coming up, to run this company better than our age group did. I’m planning on retiring when He tells me to. Otherwise, I’m enjoying it too much.”

Q: What business tactics have been most successful for the company?

A: “I don’t look at ‘tactics.’ If you operate on a tactical basis, that’s the quickest way to go out of business. A tactic is: ‘How can I get one step ahead of you? How can I get one dollar more out of you?’ “

“The most important thing in running a business is, first, having a unified mission that everyone buys into and then, having a good culture that fosters teamwork like, ‘Here’s the hill, we’re going to climb it.’  Our mission is to satisfy customers.”

For those interested, a video posted at the company website www.hermanoakleather.com describes, in nitty-gritty detail, their traditional veg-tan process.

* California’s Proposition 65 entitles the state’s consumers to special warnings for products that contain chemicals known to the state to cause cancer and birth defects or other reproductive harm, if those products expose consumers to such chemicals above certain threshold levels. — Source: https://oehha.ca.gov

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HIS TRADE SHOW CIRCUIT INCLUDES EUROPE

As sales manager for Hermann Oak Leather, Jeremy Thoene is quite familiar with the leather trade show circuit. He has represented the historic, St. Louis, Missouri tannery at places like the Pendleton Leather Show in Pendleton, Oregon, the WESA show in Denver, Colorado, the Southwest Leatherworkers Trade Show in Prescott, Arizona, and the Rocky Mountain Leather Trade Show in Sheridan, Wyoming.

“I do about 6 to 8 trade shows per year. And, we often visit other trade shows for a walk-through,” said Thoene, who has lived in the St. Louis area his whole life.  This coming January, he will be at the WESA show and during early March, at the Southwest Leatherworkers event.

Over the past three years, the trade show circuit has widened to leather shows abroad, namely, the European Leather Workers & Artists Trade Show held for the first time in Arnhem, Netherlands, in October 2018.

This past September, Thoene and Hermann Oak’s general manager, Tom Eberle, already had made plans to attend the European show. Originally, it had been held in France and Thoene attended two, in 2015 and 2016. The show’s organizers, however, took a hiatus last year to re-evaluate, Thoene said, and have since moved it to the Netherlands to allow more access for Europeans.

How was Herman Oak’s, made-in-USA, veg-tan leather received at the shows formerly held in France?  “In European countries, they seem to be very protective, or loyal, to things made in their own country,” Thoene recalled. “But, they tried our leather and were pleasantly surprised.”

“At both shows in France, we got some people interested and made sales, mainly to individual customers who typically attend these shows, like smaller custom shops run by grassroots, down-to-earth people making a living on their land or farm — people like saddle makers, jewelers and belt makers.  There were no holster makers, though. The laws are different there. It’s not like the U.S.,” he said.

Distributors brought Hermann Oak Leather to the show and they made the sales, he explained. Sales made at that time did not cover all the tannery’s expenses for the trips abroad, he said. “But, we look at these shows as long-term investments. And, we did get repeat customers. Also, some Europeans hit leather trade shows held in the U.S. I’ve seen people at the smaller craft shows here, who we had met in Europe.”

Naturally, shipping costs can hinder sales. “Any time you’re shipping longer distances, the price of leather goes up. There’s also extra paperwork. Some countries have a quota for leather, like Japan.

Nonetheless, international leather sales represent an area of growth to be further developed, he said. “We are picking up some more here and there. We’re pretty well represented in parts of the world. We have distributors in Japan, Australia and a couple in France and Germany.”

Expanding the customer base, he noted, is still an uphill climb. “If you look at veg-tan leather worldwide, it has been declining, especially in niche markets, because people are moving to a cheaper market. Most of the leather industry has switched over to chrome leather.”

“However, our traditional tanning process sets us apart. It’s a longer process, a more costly process. We think we make one of the best leathers in the world, especially for the markets we’re in. The result is the customers tell us it’s what they want.”

As for U.S. sales, “Our roots are definitely in the Western side of things — California, Oklahoma — states west of the Mississippi and most definitely, Texas. We get a nice amount of that business,” he said.

The aim of the Netherlands trip, he added, is to gain more exposure for the quality of veg-tan leather produced by Hermann Oak. “What we’re looking to do is to get across that our product is unique — not just in the U.S., but in the world.”

CONTACT INFO

HERMANN OAK LEATHER CO.

4050 North First Street

St. Louis, MO 63147 USA

Shep Hermann, president, CEO

Jeremy Theone, sales manager

1-314-421-1173

1-800-325-7950

1-314-421-6152 fax

holc@hermannoakleather.com

www.hermannoakleather.com

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