Longtime Dearborn Tech Business Gets Ahead By Staying Current
The Great Recession struck fear into a lot of business owners and executives.
It struck fear, too, into Matt O'Bryan, the president and CEO of Dearborn-based KLA Laboratories Inc., a company that does a range of IT and communication services, including installing audio and visual systems, building Wi-Fi networks and providing event production services.
But O'Bryan didn't see the recession as a time for retrenching, he saw it as an opportunity to reinvent a company that was founded on the eve of the Great Depression in 1929. As a result of the reinvention, revenue, profits and employment have grown sharply.
It followed a long-held pattern of managing with an eye toward future growth by adjusting with the times. The year it was founded, KLA began providing audio equipment and services to Ford Motor Co. It has been managing loudspeaker systems for the Detroit Tigers since 1935, and when Motown was founded in 1959 and not yet known as Hitsville, U.S.A., it was KLA that sold it the microphones that such future stars as the Four Tops, the Temptations and the Supremes sang into.
KLA THROUGH THE YEARS
KLA Laboratories Inc. founded in Detroit, lands Ford Motor Co. as
1933: General Motors becomes customer.
1935: Detroit Tigers become customer.
1942: Chrysler Corp. signs as customer.
1947: Pat O'Bryan hired.
1951: Detroit Lions sign as customer.
1954: Oakland Hills Country Club sign.
1956: O'Bryan becomes part owner.
1959: Company sells microphone to recording company soon to be called Motown.
1965: O'Bryan acquires controlling interest.
1973: Company moves to Dearborn.
1991: O'Bryan dies; his wife, Norma, becomes president. Matt O'Bryan is named vice president of operations and brother Donald VP of sales.
2002: Norma sells the business to Matt, Donald and their sister, Mary. Matt is named president and COO.
2007: In the face of the Great Recession, KLA expands to building wireless Wi-Fi networks and distributed antenna systems.
2010: Company installs Wi-Fi at University of Michigan football stadium.
2014: Company builds network at Michigan State University's stadium.
2016: Company opens offices in Ohio and Nevada.
Despite its launch as the Depression began, KLA was consistently profitable over the years, but O'Bryan said that streak looked in jeopardy in 2007, as revenue and profits tumbled. Although the Great Recession didn't formally begin until December 2007, KLA felt its impact months earlier as Ford, seeing auto sales shrink, began cutting back on the business it gave suppliers, including KLA.
O'Bryan decided to expand one of his lines of business. Instead of merely doing cabling for local area networks and Wi-Fi networks that others were building, KLA would begin installing and selling the higher-margin hardware components that go into those networks. He also expanded KLA's geographic footprint, and formed a Network Services Division and a Network Staging Center.
"Our market was shrinking. We were losing revenue. I felt if we didn't get aggressive, we were going to be in trouble," said O'Bryan.
The division and center supported his decision to start designing and building wireless local area networks and to develop expertise in distributed antenna systems, whereby small antennas are spaced throughout sports stadiums, conference centers and large business enterprises like hospitals, smoothing out cell reception and eliminating the need for large, costly antennas. Such systems are complicated and require a lot of cabling and engineering to link such things as antennas, passive splitters, feeders and active-repeater amplifiers. Previously, KLA supplied the cabling, and others did the engineering and sold the hardware.
"When KLA was founded in 1929, it was an advanced-technology company. And this let us remain an advanced-technology company," he said. Doing entire systems instead of just the cabling "has been a big part of our growth."
O'Bryan, a member of the 2007 class ofCrain's 40 under 40, has been rewarded for refusing to hunker down in the recession.
Pre-recession, KLA employed 50 and had revenue of $10 million. By 2009, KLA was down to 38 employees and $6 million in revenue.
From 2010-2015, though, with its expanded offerings, revenue climbed to $30 million, with profits up steeply. Today, the company employs 150 and could hit $40 million in revenue this year. O'Bryan expects to hire another 50.
Last June, the company opened its Technical Engineering Center on Century Drive in Dearborn. Its headquarters and sales and marketing offices remain at Chase Road in Dearborn.
The goal for clients of installing very expensive and labor-intensive distributed antenna systems is both social and commercial. The systems allow customers at large sporting events, for example, to get clear signals so they can tweet about goals and tackles and share photos on social media.
They are the same systems that allow fans at Tigers games to buy game-used items through apps on their phones and have them delivered to their seats, or to upgrade to better, and more expensive, seats. At some venues, customers willing to pay extra can order food on their phone and have it delivered.
In addition to its 81 years of service to the Tigers, KLA landed the Detroit Lions in 1951,Oakland Hills Country Club in 1954 and The Palace of Auburn Hills and the Detroit Pistons in 1987. Since 2010, it has installed antenna systems at the University of Michigan's Big House in Ann Arbor, Spartan Stadium at Michigan State University and Ohio Stadium at Ohio State University.
On April 8, KLA opened an office in Grove City, Ohio, a suburb of Columbus, to support its Buckeye state customers, including the city of Columbus, Adena Health System, Ohio State and Big Lots.
On April 26, the company announced a deal with Phoenix-based Trucom, a subsidiary of internet services company TPT Global Tech Inc., to provide an array of services. KLA will open a west region office in Nevada in June.
From humble beginnings
KLA was founded by three friends who gave the company its initials — James Kraus, David Ludwigson and Stanley Almas. The company installed antennas, radio transmission gear and time-keeping systems for early customers such as Ford, General Motors and Packard Motors. It also installed sound systems at churches, schools, government offices and sports venues.
It also, according to company lore, installed and operated sound systems at speakeasies.
In the 1940s and 1950s, KLA became a leading retailer and distributor of radios, record players and sound equipment. Eventually, it ran nine retail outlets, several inside J.L. Hudson Co. stores. City buses of the day had big banners on the side, advertising the "Ampro Hi-Fi 2-speed" tape recorders available at the KLA store at 7375 Woodward Ave. for just $159.
A photo on display at KLA's tech center shows tens of thousands of Detroiters jammed onto Woodward Avenue near the old Hudson's building. It was a war-bonds drive during World War II. There are speakers visible in the photo. They and the rest of the sound system were installed by KLA.
In 1947, the company made a crucial hire, giving Pat O'Bryan a job after he returned home from a stint in the U.S. Army. O'Bryan began purchasing stock from the founders and by 1964 owned a controlling interest.
A reinvention occurred in 1973, when O'Bryan decided to sell off the retail locations and concentrate on installing commercial electronic and communications systems. Two of the old stores remain in operation: Pointe Electronics Co. in Grosse Pointe Woods and Almas Hi-Fi Stereo Inc. in Royal Oak.
In 1978, KLA installed the cabling system for GM's first broadband local area network and eventually would install networks at plants around the country.
In 1991, Pat O'Bryan died, with his wife, Norma, assuming the title of president. Son Matt had a business degree from Cleary University but wasn't sure what he wanted to do for a living. There were offers to buy the company, and his mother convened a family meeting.
"It was a quick meeting," said Matt. They would keep KLA in the family. Matt, who started with the company in shipping and receiving when he was 16, was named vice president of operations. His brother, Don, headed sales.
"It was the fork in the road in life," said Matt.
In 2002, Norma sold the company to Matt, Don and their sister, Mary, who started working at KLA in 1986, answering phones. Today, she is marketing director and in charge of business development. Don is senior project manager of distributed antenna systems.
Rob Todd, president of Houston-based Amplified Solutions Inc., has hired KLA as a contractor for jobs at the Palace, Joe Louis Arena and DTE Energy Music Theatre. "KLA can do everything. They're a big part of our design-build," Todd said. "When they need to make decisions, they make them quickly, and their engineering is the best."
Los Angeles-based Boingo Wireless Inc. is installing Wi-Fi at Detroit Metropolitan Airport with KLA.
"We gave KLA an aggressive schedule to get the network running by the middle of May, and they're going to meet it," said Steve Boucher, a Boingo vice president. "I'm about to give them a project in Van Andel Arena in Grand Rapids."