In it for the long haul

Black Enterprise, Oct, 1995 by Kevin D. Thomson

FOR CHARLIE JOHNSON, A FORMER defensive lineman for the San Francisco 49ers and the Baltimore Colts, it was the Super Bowl of deals: A $50 million transaction that would instantly transform Johnson's eight-year-old trucking firm, Active Transportation, into a major player in the $3 billion trucking industry. Not surprisingly, negotiations were intense and meetings went deep into the night. "When you're borrowing $45 million," quips the 6-foot-3-inch, 300-pound Johnson, "everybody wants the upper hand."

Johnson, 51, ultimately came out on top. Last October, Active's president and CEO acquired Jupiter Transportation Systems Inc., a truck and heavy equipment hauler based in Kenosha, Wis. The purchase of the $240 million firm immediately made Active the nation's largest black-owned vehicle transport company. "Now nobody can say we're too small or that we don't have the systems in place to handle the business," says Johnson, whose primary business is hauling new cars and trucks for Ford Motor Co. Active also hauls trucks for Navistar International Corp. and Freightliner.

With the acquisition, Active employs more than 3,000 people and has 4,200 tractors and trailers at its disposal. While Active reported sales of $50 million in 1994, ranking No. 30 on the BE INDUSTRIAL/SERVICE 100 list, its sales could surpass the $300 million mark this year. "Charlie has accomplished what he has through hard work and perseverance," observes Peter Manion, manager of vehicle and rail logistics North America for Ford. "He's the classic Horatio Alger story."

Betty Fox, president of the Kentuckiana Minority Supplier Development Council in Louisville, adds, "Charlie has a keen business acumen and knows how to seize an opportunity. He stays in touch with the council on a weekly basis. If more business owners did that, their businesses would be better off."

To finance the deal, Johnson raised $45 million in loans from Northwestern Mutual Life in Milwaukee, and American National Bank and Heller Financial, both in Chicago. The remaining $5 million came from Johnson; his partners in Active, Alice and Wade Houston; and Jupiter's president Dennis Traha.

Active has two subsidiaries, Dallas/ Mavis Specialized Carriers, which hauls machinery and missiles, and Automotive Carrier Services, which transports new vehicles. Active hauls 500,000 new cars and trucks annually, and is equally owned by Johnson, the Houstons and Traha. (Each partner controls 33 1/3%.)

Active, based in Louisville, Ky., has come a long way since its humble beginnings in 1983. Johnson and Houston started the company, originally called the Johnson-Houston Corp., by borrowing $87,000, purchasing two Ford trucks and hiring two truck drivers. The enterprising duo met while attending the University of Louisville and often talked of going into business together.

The first major contract came in 1984 from Ford, which was looking to do more business with minority-owned firms." We just set up to do some just-in-time hauling of truck parts for their local plant," Johnson recalls. It didn't hurt that Johnson had worked for the automotive giant for 16 years as a supervisor in the Kentucky Truck Plant and had several well-placed connections.

After doing three years worth of business with Ford, the forward-thinking Johnson was ready to expand. "We had a perfect service record and timely delivery. When I went to sell them on that point, it was brought to my attention that there might be an opportunity for us to haul finished vehicles," Johnson remembers. "But that was specialized hauling--our experience was in shipping truck parts for Ford, beer for Anheuser-Busch and stoves for General Electric."

Enter Jupiter, a experienced truck hauler with more than 50 years experience. Jupiter wanted to gain an entree into Ford's Kentucky plant, and help a minority firm in the process. The win-win deal: Active Transportation was born, of which Johnson and Houston owned 60%, and Jupiter controlled the remaining 40%. "It was the perfect match. They had the expertise we needed," says Johnson.

Shortly thereafter, Ford awarded Active $5 million worth of business. Johnson, however, still had a lot to learn about the industry. "When we bought our first tractor trailer in 1987, I had no idea how that tractor made money," he says. "I rode around with the drivers to see how the productivity came into play."

Today, Johnson is more concerned with growing his business. This year's projected sales are $340 million, a significant increase over 1994's sales, which Johnson attributes to increased business at Ford's Kentucky plant. He won't say, however, if Active's operating in the black, saying only, "We're doing okay."

But Active must do more than "okay" if it hopes to compete in the big leagues. Johnson has already gone on the offensive and approached General Motors, Chrysler, Toyota and Mercedes for potential business. His strategy? Aggressively market Active as an all-purpose trucker that can meet a shipper's every need. "We have computer support that can track cars and trucks, we've done business with some of the major Fortune 500 companies without complaints and we have a letter of credit backing available cash to the tune of $45 million," stresses Johnson. "If these corporations really want to do business with a minority company, they can do it with us."