San Antonio Express-News (Sunday)
LEADING DURING CRISIS Flux:
Pandemic not the first crisis for Toyota supplier Avanzar and its CEO.
Berto Guerra, CEO of Avanzar Interior Technologies, has dealt with crises.
In 2008, about a year after Toyota plant on the South Side began producing pickups at high volume, the Great Recession forced the company to close its factory for 14 weeks. Avanzar makes seats, door panels and other parts for Toyota’s trucks. Guerra had to shutter his business, located next to the Toyota factory, too.
Thanks to a loan from Frost Bank, he was able to keep Avanzar alive through the downturn.
Two years later, in 2010, Toyota recalled millions of its vehicles because of a malfunctioning gas pedal that caused the vehicles to unexpectedly accelerate. And shortly after that, the tsunami that struck Japan and caused a meltdown at the Fukushima nuclear reactor again forced Toyota to temporarily shut down operations.
The son of a barber in Roma, Texas, Guerra said the challenges he’d faced since opening the manufacturing plant prepared him for the pandemic. Avanzar closed for ten weeks when COVID-19 arrived in San Antonio, but the plant is back up and running.
Guerra, 70, shined shoes at his father’s barbershop as a boy. He eventually became a restaurateur and later a longtime executive at SBC, which is now AT&T. He also served as chairman of the San AntonioWater System for nine years, and he led the way for the development of the Vista Ridge pipeline.
Photos of Guerra with Bill Clinton, Rick Perry and other powerful politicians adorn his office walls, alongside homages to his Rio Grande Valley hometown.
This year, of course, has been a unique challenge. About 45 employees at Avanzar contracted COVID-19 during the pandemic, and one employee died. Guerra described the loss as devastating, but he still sees a bright future for manufacturing in San Antonio. He recently sat down with the San Antonio Express-News to discuss his business’s response to the pandemic.
The following transcript has been edited for clarity and length.
Q: You started Avanzar here in San Antonio in 2005, correct?
A: It started out in my kitchen. I took an early retirement from SBC — AT&T — I was with them 27 years, and we had an opportunity to start this company, presented to us by our former mayor, Henry Cisneros. We were at a reception for Gov. Perry at (former AT&T CEO) Ed Whitacre’s house, and Henry told me “Toyota is coming to town,” which was amazing to me. He said, “I’ve been offered to be the largest supplier to Toyota.” This opportunity came up with Toyota, and he offered me the opportunity to be one of the suppliers, and that’s how we started.
We knew nothing in San Antonio about automotive manufacturing. It was not my background. I had bought my first restaurant when I was 18 years old, and I had basically developed a business acumen since I was a little boy shining shoes. My father had a barbershop, and we lived in the back of the barbershop.
We negotiated and worked out of my kitchen for about 13 months. And then we started construction on this building and the actual Toyota plant. We moved in the first week of January of 2006. And we manufactured and assembled our first Tundra in 2007.
Right after we got started and we were excited to create jobs, we struggled with trying to make it because gasoline price jumped up to $4 a gallon. We had to shut the plant down for 14 weeks. And it was a tough time for us, but with Toyota’s help, with Frost Bank’s help, we survived that downturn.
Q: How do the crises you’d previously experienced compare with the pandemic this year?
A: This year we have 1,100 employees, and we were shut down for a solid 10 weeks. This time, I had prepared a little bit better, and I had siloed some money and put it away. And we did not borrow any money, so we were able to pay all 1,100 employees 40 hours a week for those 10 weeks. It was a tough time for us.
Q: What was going through your mind as the pandemic accelerated through the spring?
A: As a leader of an organization, you’ve got to set the example and make sure that your family here, our team members, that they felt comfortable. So every Friday I would talk to them on our website, and I would tell them this is week one, we’re gonna be able to pay everyone. So stay home, stay safe, stay socially distanced. We need you to come back whenever God allows us to come back to work. This is week two, and
we’re going to again be able to pay you. Then week three — every week I’d be talking to them, keeping them informed. They were all concerned.
What did we do when we came back? We were concerned coming back to work in such close proximity would create problems for our team members. So we decided that the best thing we could do was come in during the off time and start disinfecting everything with that fog disinfector, opening up all the doors, which is not normal for us. So we came in and prepared. We would meet every day, even though we were all in our homes, and ask, “What are we going to do? How’re we going to do it? Where do we get plexiglass? Where do we get disinfectant?”
We figured it out and started tagging everything so people could socially distance, and we check temperature for 1,100 employees every single day.
Since we finally got back up to speed, we can’t build enough Tacomas or Tundras. At our dealership — we own Toyota of Boerne — last week when I went to visit, we had one Tundra and two Tacomas, when we normally have 100 of each. We’ve never sold so many trucks and cars.
It all worked out, and we have been producing the maximum amount of trucks that we can produce.
Q: Toyota in normal times operates with a tighter inventory of vehicles than most automakers, and in the last several months Toyota’s inventory has been so tight that dealerships haven’t had enough vehicles to meet demand. How does Avanzar fit into Toyota’s long-running “just-in-time” manufacturing strategy?
A: At the just-in-time plant that we have inside Toyota, we get a forecast that says, for example, “a black Toyota Tundra just left the paint shop, it’ll be at your three drive-up windows in the next hour. Have ready a gray leather interior, with doors and a headliner to match.” And so we start getting it ready — we don’t
have much of a window. And then every 60 seconds, a new truck is going by, and we’re handing them a product that we had a one-hour window to prepare.
Q: What do you think will be the long-term effect of the pandemic on manufacturing in San Antonio and Texas?
A: I see a bright future. But we can’t accomplish that bright future unless we are responsible, and we’re safe. As long as we keep our people socially distanced, checking temperatures, plexiglass in between work stations, open doors so you don’t have to touch a door that someone just touched that could have COVID.
From what I have experienced during this COVID chapter, as long as you are responsible, socially distancing, washing your hands, not shaking hands, wearing a mask, you can keep America going. You can keep us working, and you can keep us producing a vehicle that is in such high demand.
Q: You stepped down as chairman of the San AntonioWater System in August. What has the transition out of that role been like for you?
A: I didn’t want that job. I did not want to be the chairman of SAWS. Julián Castro, our former mayor, asked me one day, “Would you help me become mayor of our city?”
We lost the first election, by less than 1 percent. Second time around, we won. So by this time, I’m still struggling here, and that’s when he wanted for me to become the chairman of SAWS. And I said, “Julián, I didn’t help you so you could give me a chairmanship. I don’t have time for that. I’m sorry. I can’t help.” That didn’t work, so he had his mother, Rosie, call me. “Berto, this is Rosie. He wants to pay you back for all the help you gave him.” I said, “Rosie, I can’t.”
He called me a third time. “Berto, before I appoint someone, are you sure?” “Julián, I just can’t do it.” Then I got a call from Tom Frost. Julián has all my friends calling me. So Julián calls at 9:15 p.m., he said, “Can we meet tomorrow?” So we met at Don Pedro, and for 2 ½ hours hashed it out, and I agreed to serve as chairman. He closed the deal. So that’s how I ended up serving on the SAWS board for nine years.
I had not been able to figure out, with what a great city San Antonio is, why can’t they diversify their water (supply)? I should have never said that to Julián. He said, “I’ll bet you can help us.”