Photo by Jeff Silker
Bob Freyberg comes from a long, strong line of petroleum salesmen.
He doesn’t touch the stuff himself anymore, except when fueling his auto, but he leans on his ancestral experience, traditions and values nonetheless.
Freyberg and his brothers, Jim and Lynn, are third-generation owners of 84-year-old Mankato Oil and Tire. However, there’s no third-generation dust or faded glory in their state-of-the-art Goodyear dealership and automotive repair business. They recognize the hazard of sinking in the footprints of the past while moving from one era to another.
Their great-grandfather, Otto Bismarck Freyberg, opened the Dakotas for Standard Oil, criss-crossing the endless prairies aboard?a horse-drawn tanker, peddling?lamp oil in the early 1900s.
Their grandfather, Joey Van Buren Freyberg, chugged a Model T through Minnesota, Iowa and Wisconsin, selling Standard Oil products to small service stations. Joey eventually settled in Mankato, buying 19-year-old Mankato Oil Co., Inc., in 1938, and becoming an independent Shell Oil retailer. (That company does business under the name Mankato Oil and Tire.)
Their father, Noel Prescott Freyberg, stayed settled in Mankato. He concentrated on sales and management with Mankato Oil and Tire, working side-by-side with his brother, Duane. Although their young lives were tainted by the Depression and interrupted by World War II, they returned from the South Pacific to expand the company. They took it from a single station on Front Street to a multi-outlet enterprise before selling to their sons in 1980.
Today, Bob, 48, and his brothers, Jim, 45, and Lynn, 51, try to run Mankato Oil and Tire with the same energy and dedication invested by their father, uncle and grandfather. “You need tenacity to survive. You can’t afford to be complacent,” Bob said. “I don’t play golf. I don’t take much time off. It’s almost like being a dairy farmer.”
Like his father, Bob’s forte is sales and management. Jim, more mechanically inclined, electronically diagnoses the ills of vehicles and supervises a half dozen full-time certified mechanics and several part-timers. Lynn manages their commercial truck repair facility on Hwy. 169, two miles south of Mankato. That’s where Manato Oil and Tire headquartered until the brothers gambled that a new retail location would woo and win new customers. (It did. The company’s customer base has grown from 1,200 in 1998 to more than 6,000 today.)
Freyberg notes that books have been written about the frequent failures of enterprises run by third generations. The brothers didn’t want that to happen to them. “The secret is to assume the exact same passion and drive that the first generation had,” Freyberg said. “You have to accept risk and be committed. Commitment in life is everything, whether it’s in business or marriage. Eventually you’ll reap the reward, but you must have the patience.”
To Freyberg, Mankato Oil and Tire’s new location and building symbolize a third generation’s passion, drive, risk and commitment. It’s been “on the hill” since 1999, just off Madison Avenue in Mankato, surrounded by competitors. “I’m a firm believer in being close to the competition. It’s the automotive end of town,” Freyberg said. “Lager’s, Heintz, Clements, they’re all within a stone’s throw. We’re right in the automotive hub.”
When they headquartered on Hwy. 169, Freyberg pumped $75,000 into advertising every year, trying to convince people it was “worth the trip” to drive two miles south of town for car repairs or new tires. Last year, he spent only $12,000. Location and the least expensive form of advertising, word-of-mouth, account for the difference, according to Freyberg.
But during the agonizing years the brothers contemplated uprooting themselves from Hwy. 169, they didn’t know they might win 4,800 more customers or save $60,000 annually on advertising. All they knew for certain was that expensive land plus a $680,000 building with walls 12 inches thick added up to debt, big-time debt.
How they leapt (or crept) from Hwy. 169 south to the north end of town involved a process of research, soul-searching, consensus-building, patience, frustration, conflicting views and compromise, ad infinitum. It could become a textbook, Family Business 101.
In 1967, when everyone assumed Mankato would grow to the south, Noel and Duane Freyberg built at the Hwy. 169 site. By the time they sold to their sons in 1980, it was painfully obvious that Mankato had grown north and east, and was still growing in those directions.
For years, Noel’s three sons and Duane’s son, Steve, made the best of that location and even expanded there in 1987, building the commercial truck repair facility. “We struggled, worked hard, spend thousands on advertising,” Freyberg said. But the demographics troubled him. “That location served our rural business really well. Farmers could drive their machinery and equipment into the facility without coming into town. It served truck traffic too,” he said. “But our retail was declining” because of Mankato’s growth in the opposite direction. Competitors built on the hill, within easy distance of new residential neighborhoods. Worse yet, everything pointed to a serious, continuing decline in farm customers.
In 1984, Freyberg drew his first set of plans for moving to a new location. But he “couldn’t get a consensus” among his brothers and cousin. In 1987, he tried again. No consensus. “In 1992, we almost optioned property up here, but we couldn’t get a consensus. We didn’t want to go into that kind of debt.”
In the process, the four partners began to analyze their strengths, specialties and long-term interests. Eventually, they decided on a friendly parting. In 1995, the brothers bought out their cousin, Steve, who had grown up in the fuel side of the business. Steve took that expertise and opened a Texaco dealership in Mankato. “He does very well at that,” Bob said.
The brothers, who’d had more exposure to automotive repair and tire sales, were glad to shed the fuel portion, although they kept the name Mankato Oil and Tire. Their distaste for fuel began in the late 1970s when the company had nine service stations in Mankato, New Ulm, St. Peter, Good Thunder and Mapleton. “We also did a lot of fuel delivery to farms and had bulk plants in the small towns,” Bob said.
Freyberg said the retail gas business turned out to be highly competitive and extremely volatile, with poor margins. “We’d buy fuel by the tanker load, but we couldn’t lock in the price. Meanwhile, we’d already locked in a price to our customers, so if the fuel price went up before we loaded our tanker, we lost money,” Freyberg said. Despite low margins and occasional losses, the company still had to employ a full-time person to handle record-keeping involved in gas tax collections.
Worse yet, most of the company’s underground tanks were old and had to be inspected by the Minnesota Pollution Control Agency (MPCA). Two particular MPCA inspections further soured the brothers on the gas business. “One young inspector didn’t screw down a vent when he pressurized a tank at our Front Street location, so eight gallons of gas came out and went into the ground,” Freyberg said. “That constituted a ‘spill’ so we had to excavate the tank and island at our expense. It cost us about $10,000.”
Two years later, MPCA wanted to inspect an underground tank that Freyberg said hadn’t been used in 35-40 years. The inside was dry and rusting. “We encouraged them to drop a light down in it so they could see there hadn’t been fuel in there for years, but they insisted on pressurizing it. We had to put 500 gallons of gas in so they could test it and they blew the bottom out of the tank,” Freyberg said. The gasoline escaped into the basement of a nearby pizza parlor, which caused a major commotion in the neighborhood.
“My brothers and I decided this was stupid. The margins weren’t there to absorb these kinds of incidents. It was ridiculous. We wanted to grow, but we didn’t see a rosy picture for fuel,” Freyberg said. Sales at the pump came at skinny margins and the prospect for on-farm delivery wasn’t good either. “The demographics of farming were changing so dramatically and customers were disappearing at an alarming rate year by year. We found ourselves in a market that was really dying off.”
During their soul-searching in 1992-95, the brothers decided they wanted out of the gas business, while Steve opted to stick with it. “To be really good at what we were doing, we had to specialize, so we came to a friendly agreement.”
When the brothers bought Steve out, they gave up pumping gas and delivering fuel. “We knew that now we’d have to make some good decisions. We’d have to apply the same amount of passion that our grandfather and father had put into the business,” Freyberg said. “We also knew that passion wasn’t going to come without some risk.”
Finally, on Dec. 3, 1998, the footings were poured for a new Mankato Oil and Tire building. “We understood this needed to be a state-of-the art facility if we were going to have a landmark for the third generation. It had to be a preparation for what the future had to offer,” he said. “Number one, we wanted an excellent location. Number two, we wanted a good building that wasn’t gong to deteriorate. We wanted a permanent asset. We didn’t want to move out into the country and put up a tin building and have it be worth nothing when we decided to retire.”
Freyberg said the structure was designed “generic enough so any business could move in here if we wanted out in 10 years. It has a fresh air system, carbon monoxide detectors and an infrared heating system. It’s so tight that in the summer, you can turn down the air-conditioning down on Saturday afternoon and by Monday morning we’d gain only about three degrees.”
The building was placed as close to the street as possible “so people can drive by and see in the showroom. If we had to put up a building, why not build it so it can market itself? It’s silent marketing, a more efficient form of marketing. We have an unbelievable number of people walking by here. I often find fingerprints on the windows in the morning, left by people looking at the displays of custom wheels.”
That’s not unlike the line-of-sight marketing done by Great-grandfather Otto Bismarck Freyberg aboard his horse-drawn tanker on the flat Dakota prairie. His odd-shaped wagon made an easily identifiable speck on the bleak horizon. “Women would see him coming and ring the church bell. That was a signal they should all gather at the church with one-gallon jugs to fill up with kerosene,” Freyberg said.
Grandfather Joey Van Buren Freyberg would be amazed at what’s in the showroom if he could stand beside those who leave their fingerprints on the glass. There are racks of NASCAR clothing; shelves of NASCAR collectibles, displays of high-tech tires with a myriad of rubber tread designs bonded to polyester and steel.
Joey would have appreciated these tires on sales trips with his Model T. “He used to take six tires with him, mounted on rims, all for spares,” Freyberg said. “We have pictures of him beside a stream, putting on yet another tire.” Those tires were made of rubber bonded to cotton fiber, nowhere near as sturdy as today’s tires. But they did have advantages. “During the Depression, if farmers had a blowout, they could stitch the tire together, fill it with oats and drive on it,” Freyberg said.
As the brothers plotted their future, they knew they had to retain some of the past, especially the tradition of expert and ethical automotive repair and tire sales. But there was no place in their plans for the typical repair and tire shop, with low ceilings, dingy floors and an overwhelming smell of rubber.
“The biggest struggle we have in our industry is that nobody walks through the door for the fun of it, but because they have a problem,” Freyberg said. “We constantly struggle with how to make it fun to come here. That’s how we came up with the idea of carrying this NASCAR stuff.”
Their new headquarters has a high ceiling and plenty of plate glass windows, so natural light floods over the merchandise. The floor is a distinctive, eye-catching pattern of black and white tile. Tires, gleaming black and white, are arranged in eye-pleasing assortments. Custom wheels reflect the sun. NASCAR clothing and collectibles add texture, variety, color—and fun.
By looking around the showroom, by studying the financial reports, Freyberg knows the brothers made a good decision in moving. But debt retirement remains an important goal. That subject leads Freyberg to fretting about the state of ethics in the automotive repair industry.
“We could retire this debt in half the time if we chose not to be honest,” he said. “The consumer today is highly educated and highly motivated, but they don’t know diddly-squat about their automobile. They’re extremely dependent on a repair facility’s ability and honesty.”
Freyberg said Mankato Oil and Tire’s mechanics often find original equipment oil filters and air filters with original stickers that customers assumed had been replaced. “They’ve been paying for service they haven’t been getting. They think when they get their oil changed that they’re getting their filters changed too, but they’re not,” he said.
“We stand behind what we do. Jim looks at every single job to be sure it’s billed properly. I look at every transaction I’m responsible for,” Freyberg said. He won’t pay mechanics on a commission basis because he believes that can lead to abuses, attempts to make repairs that aren’t needed. “We’ve developed a very trusting clientele. There’s enough legitimate business out there without looking for repairs to make that are not legitimate. If you’re honest, we believe you’ll get more business.”
Still, debt reduction lingers as a “large motivation, trying to get to the point where we have none. When that day comes, what will I do? I don’t know,” Freyberg admitted. “I make my one-, five- and 10-year plans for the business, but haven’t done one for my personal life.”
It’s a life that’s been immersed in a family business, an immersion sometimes troubling to Freyberg, but more often it contributes to a sense of satisfaction. “I love a family business, but instead of focusing on your talents and desires, you’re compromising them constantly. You’re not going to grow as fast as a sole proprietor,” he said.
Still, Freyberg has enjoyed the family aspect and “I don’t want to say that anyone held me back.” The rewards have been multiple, broadening and satisfying. “You deal with the banker, you deal with the insurance man, you deal with the attorney, you pay the real estate taxes, you pay your employees and provide them a living and somehow in this mix you gain some satisfaction that you’re independent.”
To Freyberg, that satisfaction outweighs a corporate alternative. “I’m not just pushing a pencil all day long for a big corporation, and getting a paycheck no matter how I push it. Here you either push it well or you don’t get a paycheck. If you push it poorly, you won’t survive,” he said.
But there’s no escaping the family and its history. “We’ve grown up with two generations of philosophy. Will that philosophy stay the same? No. It changes. It’s a constant struggle. Do we do it like we used to or do we go in a new direction? The pressure is on because sometimes you don’t really know what’s best.”
At such moments, Freyberg realizes that just having grown up in the business isn’t a substitute for the direct, personal experience of previous generations. “I told my dad before he died, that if I just could have inherited his experience, lived in his shoes and learned…. with the Great Depression and Word War II, his generation went to hell and back.”
Freyberg also realizes that there’s not likely to be a fourth generation running Mankato Oil and Tire. “Lynn has a daughter, but she has no interest. Jim has two daughters, but they have no interest. I have a son who’s a senior at the University of Minnesota in Duluth, getting a degree in physics and math. My daughter just got married and lives in Scottsdale, Arizona, where she’s the branch manager for a mortgage company,” Freyberg said.
There’s not a bit of remorse as Freyberg counts out the next generation. “My wife and I raised our kids with the understanding that they wouldn’t work for me, wouldn’t know about my business. We wanted them to have the best education and make their own decision on what direction they want to go in life,” he said.
But he sees the Freyberg legacy continuing in these children. “My daughter couldn’t change a flat tire or check her oil, but when I see her business philosophy, her financial management, I know the fourth generation goes on,” he said. “That’s the biggest success I’ll have!”
6-1 Bob Works 24/7
There’s a reason people don’t mix politics or religion with polite dinner conversation.
“Polite” can go out the window if politics or religion trip someone’s trigger at the table.
Take Bob Freyberg, for example. Here’s a levelheaded, analytical, forward-thinking, friendly businessman who seems fairly easy going. But mention politics, especially Mankato politics, and there’s the risk he’ll harden his vocabulary and get painfully specific in his criticism of political processes, decisions and attitudes. He does it, however, without being ill-tempered, livid or volcanic. Nonetheless, he can be serious and specific.
He hasn’t agreed with most of what the Mankato City Council has done for the last 20-30 years. Frustrated, he ran for a council seat himself and now is in the fourth and final year of his first term. He became a council candidate because “I firmly believe you only earn the right to criticize when you’re willing to walk the walk. I didn’t want to criticize city government without understanding how city government works and its procedures.”
“It’s been a tremendous learning experience,” Freyberg said. But so far, not much has changed. He generally goes in one direction, the city council in another. His nickname, “6-1 Bob,” reflects that division. Quite often, the council votes 6-1 on issues, with Freyberg on the lonesome end.
But after three years on the council, Freyberg remains a tough critic. What irritates him most is the spending tendencies of political bodies. That includes state legislators who he says curry the favor of voters by supporting tax rebates rather than addressing issues like debt retirement. It also includes Mankato spending $675,000 for a bike trail.
“I know what it takes to generate one dollar of profit,” he said. “The sometimes irresponsible use of tax dollars infuriates me because I know the sweat equity it took to generate those dollars.” He’s offended when he believes tax dollars are “squandered” by people who’ve never worked in the private sector to learn “the value of that dollar.”
“I could give you countless examples of waste and inefficiency,” Freyberg said. But he moderates his displeasure. “What I did learn (by serving on the council) is that the people making these decisions aren’t doing it to be malicious. They feel they’re serving a public purpose,” he said.
Freyberg finds himself at odds with other council members and city staff because he often disagrees with the validity of the “public purpose.” That includes the $675,000 bike trail. The money will be used to connect the Sakatah and Red Jacket trails, using a route that “parallels the railroad tracks, goes through swamps and an industrial park. It’s the armpit of Mankato,” he said. “Why would they want to ride through this area?” He feels differently about the Red Jacket trail, which starts at the Holiday Inn in downtown Mankato. “It’s a beautiful trail. It runs through hills and valleys out to Rapidan.”
Such trails may be fashionable at the moment, according to Freyberg, but he said it’s a question of priorities. “We have so many other areas where we need to spend money.”
Freyberg also finds himself in the minority on whether the DM&E Railroad should be forced to bypass Mankato. By a 4-3 vote, the council wants DM&E to go around town.
“We promote ourselves as a regional community, but we defend our border as if we’re at war,” he said. He believes it’s wrong for Mankato to expect area residents to spend their retail and sales tax dollars in the city, then put the railroad problem in the laps of those people. “We want all their regional spending, but then we want to keep the train on their side (of the border). We need to strengthen our sense of community and reach out more to those who are providing us the opportunity to grow as a regional center,” he said.
Freyberg believes a bypass would be a poor environmental choice. “If you could see where the bypass would go, even if you’d never heard of the word ‘environment,’ you would not want the train to go there, cutting into hills and valleys, removing Mount Kato and part of the small community of Skyline,” he said.
“We’ve been running trains through Mankato for more than 100 years. The only responsible thing is to have it go through here in the existing corridor,” he said. But that’s not a popular position to take in Mankato, according to Freyberg.
Freyberg never says it, but one of the roles he may play is being the city council’s “conscience.”
“When you reach a certain age in life (he’s 48), you’ve matured enough, have enough experience in your background, that you can ask intelligent questions,” he said. “It’s not that I have intelligent answers. If I’m dead wrong, I’m dead wrong. But at least I have the satisfaction of asking the question.”
He’s struggling with whether to seek re-election. He puts in 80 hours a week, 20 on city business and 60 at Mankato Oil and Tire, where he and his two brothers are third-generation owners. He endures this schedule, and the aggravation that goes with the council, because “I like to be challenged. Victory in anything in life is accepting the challenge. A great burden has been lifted, because you don’t have to worry about winning or losing, just accepting the challenge.”
No matter what the issue, Freyberg said, it’s important to “know that you gave your best, did your homework and research. You may lose because of philosophical differences, but if you did all you can, you feel good about it.”
© 2002 Connect Business Magazine. All Rights Reserved.