General Motors had a big manufacturing problem after sales began recovering in the aftermath of the Great Recession more than a decade ago, and Bob Kaiser and his company, Gallagher-Kaiser, were there to solve it.

The automaker was sitting on promising new-product programs for major nameplates, including fresh versions of the key Chevrolet Silverado and Cadillac Escalade lines. But when it came to building or refurbishing the assembly plants where those new models would be finished, GM was finding it couldn’t count on one of its most important contractors — paint-shop builders — to stay within budget, keep their promises, and work with the automaker on improving the process.

Kaiser stepped into that breach in a major way. Gallagher-Kaiser long had been a paint-booth supplier for the Detroit Three automakers. “We used to have an adversarial relationship with the OEMs,” concedes Kaiser, CEO and owner of Gallagher-Kaiser in Troy.

Much of the bad blood stemmed from a sort of reign of terror initiated in the early 1990s by José Ignacio López de Arriortúa, General Motors’ purchasing chief at the time, whose modus operandi of beating suppliers into pricing submission was copied by other automakers. “They’d try to get the most out of you, and you out of them,” Kaiser recalls. “It was bad.”

But early in the last decade, the second-generation leader of the Kaiser family business grasped how the situation could be changed and provided a solution that Gallagher-Kaiser and GM enjoy to this day: a strategic partnership formed in 2013 that has taken paint shops off the automaker’s worry list.

During this time, GM was frustrated with the performance of some of its paint-shop suppliers in fulfilling their bids. The automaker wanted a long-term partner, and Gallagher-Kaiser already had completed the most difficult paint shops for GM, at the lowest cost, on time and safely, taking on high-risk projects and demonstrating prodigious planning to complete them.

Indeed, since the beginning of the strategic partnership, “We’ve done every paint shop in North America for GM in one way or another,” Kaiser, 67, says.

Since that time, GM has recognized Gallagher-Kaiser as a supplier of the year 11 times, out of a total of about 20,000 suppliers to the OEM, and Kaiser is one of 17 members on the company’s esteemed Supplier Council.

The latest showcase for the partnership is GM’s “Factory Zero” in Hamtramck, the plant that originally was known for its colliding assembly-line robots after it opened in 1985 but lately became the company’s first fully developed EV plant.

It produces the GMC Hummer EV pickup and SUV, and the Chevrolet Silverado electric pickup, and is slated, someday, to be the home of the Cruise Origin, the company’s planned autonomous vehicle. Factory Zero “was a big project and a difficult job, but we got it done on schedule and on budget, and during COVID-19,” Kaiser notes.

Forming the strategic partnership with GM also exemplified how Kaiser works: seeing opportunity, throttling into and beyond it, and coming out on the other side as a winner. Whether it’s as a national boat-racing and a sporting-clays shooting champion, in growing a highly successful Tier 1 component of Detroit’s native industry, or in making a big-stakes bet on diversifying into other industry verticals, Kaiser keeps getting the jump on rivals and beating down obstacles on his way to success.

Or, as he puts it, “Dominate, win, excel.”

For Kaiser Enterprise, winning has meant becoming the largest independent, privately owned unionized custom sheet-metal manufacturer in the United States, initially through its paint-booth business. “We used to have eight competitors, and now it’s down to just two or three of us,” Kaiser says. “We’re a survivor in this industry and we have a lot of room to grow.”

For example, Gallagher-Kaiser is building the paint shop for Volkswagen’s new $2-billion plant in South Carolina, where it will produce its Scout SUVs.

The company’s empire is growing even more through diversification into serving more industries. Altogether, Kaiser’s companies — known collectively as Kaiser Enterprise — now enjoy annual revenue totaling about $1.5 billion, up from just $70 million for Gallagher-Kaiser a mere decade ago. Kaiser Enterprise now employs some 1,500 full-time employees at 15 facilities around the continent and utilizes another 6,000 contract workers at any given time.

But winning is about more than plotting a grand strategy and executing it well. For Kaiser, it’s also about those people, and it’s about equipping them to succeed. In his view, business is a team sport.

“I want to win and dominate. To do that in a race boat, you can be the best driver in the world, but without a good piece of equipment and without the best people, you can’t win,” he says. “You can’t win in business without the best people, and if you don’t give them the best tools.”

No doubt, the “best people” for Kaiser includes his family. The third generation in family-owned companies is typically where the guidance from previous generations and interest among the youngest members often begins to fall apart — but that’s not the case with Kaiser Enterprise.

Joseph Kaiser III, Bob’s late father, founded Gallagher-Kaiser 72 years ago and built the company for decades. He retired at age 60, in 1984, when his sons bought the company. His wife, the late Marguerite, initially worked at the company, but later became a homemaker.

Both parents imbued their sons, Bob and Joseph IV, and their daughter, Jacqueline, with competitiveness. Their father was “the driving force to get it done and complete the task,” says Joseph Kaiser IV, eight years Bob’s senior, while their mother understated it. “She’d say, ‘I’ll help and wish and pray that you do well and get that contract,’ ” Joseph recalls. “And then, once we got it, she’d say, ‘Are you going to make any money on it yet?’ ”

There were times when that was a serious question, most recently during the Great Recession of 2008 and 2009, when the Detroit Three automakers slashed capital expenditures. “(Gallagher-Kaiser was) basically close to going broke, but it was very well hidden from me,” says Robert S. Kaiser II, Bob’s son. “The company put up everything it had, and survived to make payroll and keep people employed. A lot of people would have panicked.”

Bob Kaiser says during 2008 and 2009, “We had to figure out how to stay alive. We even

went to Las Vegas and did HVAC work for casinos and McCarren Airport (now Harry Reid International Airport), and at a prison and a few nightclubs. We were flexible and pivoted.”

Joseph Kaiser IV was CEO of Gallagher-Kaiser until 2014, then retired and sold his share to Bob. “Joe has been the best teacher, and my father was my mentor,” Kaiser says.

Tracy E. Roberts is a longtime executive of the company and a family confidant, having been with them for 27 years. Today he’s president and COO of Kaiser Enterprise. “I’m (Bob’s) partner in everything we do,” Roberts says. “We bounce ideas off of each other like brothers, have debates. It’s business and personal.”

He appreciates the management style his boss has developed over time. “Bob lets the entire organization do things,” Roberts says. “We’ll make decisions in 10 minutes to pivot and go do something; it’s not like a giant corporation where you have to go through layers of approvals. If it makes sense and we can put it on paper, then execute it, he allows us to do that.

“He’s smart enough to know that he doesn’t know it all, and surrounds himself with a good

team and gives us the flexibility to succeed. He doesn’t micromanage things.”

A key member of the current management team who’s also family is Joseph Kaiser V, who’s 47 years old and president of Universal Piping, a major company in its own right that joined the Kaiser Enterprise umbrella via acquisition in 2010. “He’s doing a fantastic job in growing UPI,” Kaiser says of his nephew. “And there will be other opportunities for him as we continue to grow.”

Yet the father has made it clear his son is the heir apparent, and will eventually run Kaiser Enterprise. It’s an early call, Bob Kaiser concedes, and Robert II “has to prove himself as to when this will occur,” but “he’s the one that’s going to be taking over, and I’ve made that clear to everyone.” Bob Kaiser’s other offspring, Julia, has an interest in acting and manages a global real estate portfolio.

Robert II was a star hockey player at the University of Massachusetts at Amherst and had a shot at a career in the National Hockey League, but three shoulder surgeries short-circuited things. He joined Gallagher-Kaiser in 2021, and today is vice president of Kaiser Enterprise. “He’s taken his leadership skills and competitive fire from the ice to the business world,” Kaiser says. “He’s a very serious and intelligent young man, and I’ve prepared him and he listens well.”

One of Robert’s first gigs at the company was to learn how to perform the field installation of paint booths at Factory Zero, including how to deal with subcontractors. “Dad said I need to understand everyone’s daily aches and pains, and be in their shoes,” Robert II says. “He’s so adamant at putting me in every level of the business.”

The son then rotated around the company for a year, shadowing department heads, and for the past couple of years has served in sales and estimating, where he’s focusing on business development and customer relationships.

“Our mentality is to make sure each generation makes things better,” Robert II says. “My dad and my Uncle Joe took it to the next level, and I’d like to do the same thing they did. That’s the goal. Keep pushing it forward and make it more successful — but that’s when I’m ready and if I prove myself. Nothing is a guarantee in life.”

Bob Kaiser not only believes in the leadership he’s assembled around him, but also in the skill sets of the specialists he’s brought under the Kaiser Enterprise umbrella. He says they’ll provide the knowledge, technology expertise, and human-capital base for still more diversification and organic growth.

“We have more than 200 engineers who are very well-versed in air, humidity, and temperature control,” he says. “They’re the best in the world. They’re mechanical engineers, electrical engineers, conveyor engineers, and structural engineers. We have people with doctorates in computational fluid-dynamics modeling, and in-house design engineering. We use augmented reality and ghost facilities and digital twins, and within a matter of a very short time, we can show a customer what their paint shop or data center will look like.”

Having hundreds of specialists in in-house, from sheet-metal workers to plumbers, gives Kaiser Enterprise a great bullpen to pursue more diversification of its verticals.

Beyond management acumen and technical capabilities, Kaiser also takes pride in the company’s relationships with the manufacturing rank-and-file, the skilled tradespeople, and the production workers who fabricate and assemble the massively complex systems installed by his companies. “I started out at 17 years old in the shop,” he says. “I grew up with many of these people. I can walk through a shop and (I) know one-third of the workers and their wives and kids.”

One way Kaiser advocates for his employees is by making available to them an online wellness program called TLConnection, which is operated by his fiancée, Tanya Clark. Kaiser Enterprise companies are among the first to offer an instruction platform of what Clark calls a “wellness journey” that involves free weekly webinars with experts from around the world in such areas as nutrition, strength, and “mindfulness.”

When it comes to traditional worker advocates, Roberts mainly handles dealings with the International Association of Sheet Metal, Air, Rail, and Transportation Workers union, which represents many hourly workers at Gallagher-Kaiser. “It takes transparency with unions, and we communicate extremely well with them,” says Roberts, who sits on the union’s apprenticeship-training committee in Detroit. “We’re up front. We need them to be successful, so why be confrontational?”

The two corporate leaders aren’t fazed by the militance shown by United Auto Workers President Shawn Fain in last fall’s strikes against the Detroit Three automakers, which produced double-digit pay raises in new contracts. “I try to make sure we have a non-adversarial relationship with the union, just as I encourage and insist on not having an adversarial relationship with a customer,” Kaiser says.

Kaiser’s care for his people extends in a particular way to worker safety. “It’s paramount,” Roberts says. “With our thousands of activities every day, if there’s an incident on any of our projects, or even a near-miss, (Bob) and I are notified within 30 minutes and we make sure the job is secured, the customer is secured, and those individuals are taken care of.”

Consider, building paint shops isn’t a risk-free, hazard-free environment. People can be working 200 feet in the air. Kaiser’s view is that, as human beings, every individual deserves to go home to their family safe each night. Still, some workers can be like cowboys; they’re macho and want to prove themselves. To offset this, Kaiser works hand in hand with his overall team, as well as suppliers and unions, to affect workers’ decisions in a positive way.

In a not-so-roundabout manner, Kaiser’s concern about safety is an extension of his penchant for cleanliness. “The thought pattern,” Roberts says, “is that people won’t get hurt if things aren’t sitting around on the floor.”

There’s clean, and then there’s what associates call “Bob Kaiser clean.” The absolute white-glove-proof condition of Gallagher-Kaiser’s plant along Mount Elliott Street in Detroit, for example, is evident to any visitor — and it’s clearly not just being staged for a day.

A place for everything and everything in its place goes for Kaiser personally, too. “In Dad’s pantry, everything is labeled with label-makers and organized a specific way,” Robert II says. Clark observes: “He kind of treats his home almost like a plant. He walks through and does a punch list, and then immediately corrects what isn’t in place — in a beautiful way, not a crazy way. He wants everything functioning to the greatest of its capacity.”

Still, everything about Kaiser’s approach to management and business would go for naught if he didn’t get the big picture, the strategy, right. And in that way, Kaiser has been succeeding mightily with a massive, years-long shift of his enterprise away from auto-industry dependence and into broader arenas. It’s an approach that’s looking better and better as automakers reallocate more capital spending to comply with the industry’s government-forced transition into electric vehicles.

“When the OEMs start spending more money on batteries and EVs, it leaves less money to build new paint shops,” Kaiser says. “They’ll slow down in that area. So we must pivot and be flexible, and adapt to the new situation. A lot of times, if you don’t jump on things right away, you’re too late.”

In diversifying into supplying air-purification and climate-control systems to other industries, Kaiser Enterprise has leveraged two main things: Gallagher- Kaiser’s expertise in handling and cleaning air and taking care of pollutants, which can be applied in lots of factory settings, and its stable of tradespeople and their transferable skills.

Major acquisitions have provided much of the fuel for growth, such as Kaiser’s purchase of Universal Piping in 2010. The move made Kaiser Enterprise one of the leaders of America’s mechanical-piping industry and took the company into verticals ranging from wastewater treatment facilities to nonindustrial businesses including hotels, schools, and hospitals.

“When we acquired UPI, they were doing probably $10 million to $15 million a year in revenue,” Kaiser says. “Now, that company is doing well over $300 million, and Gallagher-Kaiser represents only about 30 percent of their business.”

UPI just built a new, 135,000-square-foot facility in Georgetown, Ky. — the same town where Toyota has assembled vehicles such as the Camry and RAV4 since 1986. The UPI plant came about through a consolidation of two local businesses.

“We built that new facility to give UPI the wherewithal and tools to put 40 feet under hook (overhead cranes) so we can build large modular sections” of piping systems, Kaiser says. “I learned through my life to build new rather than rework existing, because in the end, you don’t get what you want otherwise. Paint shops and large installations are all about modular build. That ensures quality and minimizes time in the field for the schedule of installation for the owner. And it’s safer. Just a better quality of work. Everything is plug-in-place, as long as you put in the engineering time upfront.”

Taking the organic route, Kaiser created Kais-AIR in 2020 to provide design, engineering fabrication, and installation of modular industrial equipment. In 2022, Kaiser bought Commerce Controls, a Novi-based provider of turnkey controls systems in all sorts of industrial plants.

“We acquired the best controls company in the world, and suddenly we have 60 more controls engineers,” he says. Last year, Kaiser Enterprise purchased Ventcon in Allen Park, an HVAC-sheet metal specialist — it uses sheet metal to build vent ductwork.

Combining all these capabilities has made Kaiser Enterprise something of a one-stop shop for the handling of air in practically any industrial setting. Now, for instance, the company is getting contracts to outfit EV battery production plants, with the hundreds of separate dehumidification units each requires to ensure the quality of the components.

Illustrating the sheer number of assemblies required in a lithium-ion battery plant while talking in a conference room at the Mount Elliott plant, Kaiser draws a bunch of smaller boxes within a much larger box on a whiteboard. “All of this is worth hundreds of millions of dollars in a battery plant, and we’re striving to provide them for many North American facilities,” he says.

From there, Kaiser Enterprise has “picked up all this ductwork. There are 30 miles of ductwork in a battery plant, and we’re in six battery plants right now.”

The company also has tapped into the explosive wave of data-center construction across America to support the latest artificial-intelligence technologies.

“It’s a similar deal,” Kaiser says. “Also with major financial institutions. All those computers get really hot and they have to be cooled. If they go down, the financial institutions can stop. When we bought a majority interest in Ventcon, it was doing $100 million in business. We have $500 million in Ventcon’s backlog right now.”

One method Kaiser has brought to “the battery world” as it competes for business at new multi-billion-dollar facilities is to build Ventcom sheet-metal shops in smaller installations close to its customers, which cuts what often is the extreme cost of logistics for ductwork and stops the necessity of what Kaiser calls “shipping air.”

“You’ve got a load of pipes as big as this room that are just air inside,” Kaiser says, sweeping an arm across his office. “And we’re talking about a half a billion dollars of ductwork a year. That’s a lot of air.”

Kaiser Enterprise also further verticalized its capabilities last year by acquiring Ferndale-based Rival Insulation, which specializes in mechanical insulation in a variety of verticals, including automotive and heavy industrial.

As Kaiser puts it, every element of his diversification push is in some way “about air, which is what we’ve done our whole life. We’re very conscious about the fact that the company started out as a pollution-control company, and we’re going back full circle to minimize any pollution that paint shops could cause, and data centers, and battery facilities.

“We care about the environment. Our R&D focus is heavy on developing sustainable products.”

Gallagher-Kaiser’s paint-shop work has taken the company into plants in Canada as well as in Mexico, as more automakers have opened assembly plants there. And its geographic diversification continues: Gallagher-Kaiser recently opened an office in Stuttgart, Germany, to pursue paint-shop work with automakers in Europe.

“I like where we are with our footprint,” Kaiser says. “We have to be flexible and versatile, and we can go anywhere. But that doesn’t just come because you go out and buy (capabilities). You take the success of these individual corporations and put money back into them to hire more people and grow organically and increase revenues and get into different marketplaces. That’s how this has grown.”

Kaiser continues to stoke a competitive fire that provides energy to all of this. It helps that from a young age he set and met high standards, whether it’s leading and winning major speedboat races or shooting sporting clays.

“I’m motivated by competition,” he says. “We work hard and play hard. (But) I’m a victim of my own passion, because I think about business 90 percent of the time. I’m happy with the business, but I’m never satisfied. We can always improve.”

Powerboat Racing

Thirty years ago, Bob Kaiser was an offshore-powerboat racing champion. And, sure, he still has boats, including a doozy: a 48-foot MTI catamaran with 2,700-horsepower that clocks out at 170 mph.

But Kaiser’s days of competitive racing ended about a quarter-century ago after he hugged his little daughter, Julia, and started a world-championship race in Florida, ran out in front of the pack, and then hit a big swell of Gulf water that threatened to turn his 40-foot Cougar catamaran on its top — likely injuring pilot Kaiser and his throttleman in the process.

Kaiser’s parents owned a lakeside home in Ontario, and his family summered there. Kaiser also grew up in Grosse Pointe, plying Lake St. Clair in boats as a kid and even motoring down to Lake Erie.

“I had my first boat with a five-horsepower engine on it at 8 years old,” recalls Joseph Kaiser IV, Bob Kaiser’s older brother. “So I’d teach him how to drive it at a very early age, and we’d always wear life jackets and take safety courses.”

It wasn’t long before Bob Kaiser was pushing the limits in competitive speedboat racing. “I saw a race on Lake St. Clair and wanted to do that,” he says. After a stint driving for the Chrysler Laser team, in 1986 Kaiser started his own race team that “became a dominant force in offshore power racing.”

Over 14 years, Kaiser and his team notched more than 30 wins, including national and world championships, and he became the world speed record-holder for all boat types. He entered the sport’s hall of fame after he was done.

Although there’s a tight comparison between boat racing and auto racing — they’re both highly technical and require strength — major differences are evident, as well.

“With boat racing, you’ve got ever-changing conditions, unlike car tracks,” Kaiser explains. “You might have big seas or flat seas, you have to determine the size and depth of props, how to set up the boat with weight and ballast, and you have both a driver and a throttleman.”

Kaiser and regular throttleman Errol Lanier were “known as some of the hardest chargers in the sport’s history,” according to speedonthewater.com. Indeed, Kaiser spent several years “in a pretty wild lifestyle, while my brother took care of the business,” he says. “He held the fort down and let me do these crazy things.

“We had a lot of accidents,” Kaiser recalls. “One time we flipped over backwards and did a complete circle at 115 miles an hour and landed back on the bottom (hull). We were both thrown out of the boat and were picked up in a helicopter basket. I feared I was paralyzed. Three weeks later, I went to Bimini and back in a race boat.”

But there would be an end, soon after that ominous day in 1998 when Kaiser and throttleman Steve Curtis were participating under a Budweiser sponsorship in the world championships. Curtis “was aggressive, and coming out of Key West we hit the first wave and launched 50 or 60 feet up, and I said to myself, ‘Oh my God, I hope I don’t die today.’ I was worried because of my daughter. I raced one more time, took second in the worlds, and I stopped racing.”

— Dale Buss

Smooth Finish

A vehicle’s paint job is a huge point of scrutiny among consumers. Modern vehicle designs that entail two tones and bright, unconventional colors make the coating process even more challenging.

So constructing and outfitting a modern paint booth in a U.S. assembly plant — that enclosed, pristine, 1-million-square-foot space where much of the car’s magic happens — is complex and typically comprises about one-quarter of the entire cost of the facility, which can cost $2 billion or more.

“A car goes into a paint shop and never sees the outside atmosphere again until it’s a really pretty car,” says Bob Kaiser, CEO of paint-shop builder Gallagher-Kaiser, part of Kaiser Enterprise in Troy. “It takes miles and miles of piping, wire, and ductwork to get it to that point.”

And, notes Kenny White, General Motors’ former paint-shop manufacturing director, “there are so many levels of variation” to take into account in the construction of a paint shop, including line speed, levels of automation, production schedules, buffers and enablers, and if there will be three shifts painting vehicles. Putting a paint shop in a brownfield site versus a greenfield factory can drive up costs, and the chosen paint technology can have a financial impact, as well.

“These are 30-plus-year assets that have to serve multiple product programs” that only “start to pay for themselves over time after being amortized over several programs,” White says.

Once inside the confines of the system, the vehicle is pre-treated, “electrocoated” in a dip tank, sealed, primed, run through “base coat” and “clear coat” applications, then travels on to what is called the “finesse deck” for light repair.

One key operating technology where Gallagher- Kaiser has excelled is known as a “scrubber,” which removes excess paint particles from the air so they don’t pollute the enclosed environment. The company offers either a dry method, using filtration to collect the particles, or a water-wash method.

“Getting it right on a consistent basis is where the magic is,” Kaiser says.

— Dale Buss