Mitchell "Moe" Truman learned his most important business lesson from his father, not from studying business management at Brigham Young University.
College educators told him the path to becoming a millionaire was to use interest and borrow money.
Truman's father, Richard, a product of the Great Depression, taught him differently. Never borrow. Pay cash or don't buy it.
Now he feels embarrassed that he "soiled" the family's name.
"During the downturn, we couldn't shed assets quick enough, so we went into bankruptcy in February," said Truman, chief executive officer of Pan Western Corp. in North Las Vegas. "Debt is ugly and you find out who your friends are."
Richard Truman was a schoolteacher and basketball coach at Las Vegas High School when he started a trucking company with his brother in 1970. Their father had also been in the trucking business.
From a small fleet focused on the Los Angeles basin, Pan Western grew into a multidivisional corporation serving 11 Western states, Canada and Mexico. Tons of cargo have been shipped millions of miles from the 60-acre loading yard at 4910 Donovan Way, near Interstate 15 and Craig Road.
Specializing in rail transportation, Pan Western has 24,000 feet of track switching from the Union Pacific line that runs along Interstate 15 and a 250 rail-car capacity. The company's fleet includes flatbeds, vans, tankers, set decks, pneumatics, belly dumps and side dumps.
Question: You started working as a "grease monkey" for your father's business when you were 10 years old. What did he teach you about running the business?
Answer: Hard work and basically cause and effect. You want something, you work hard enough and get it. My dad is a moral man. He taught me about morals.
Question: What kind of shipping do you do?
Answer: Transportation of flatbeds, which is building materials, and vans, which is consumer goods. It ranges from beverages to hazardous materials. On the railroad side, we do transloading of material from railroad cars to trucks - liquids, acids, caustic soda, ethanol.
Question: Is most of your shipping inbound or outbound?
Answer: It's through Las Vegas, so it doesn't originate or end here, it just goes through. We pick up stuff in L.A. and take it to points in other Western states. As a byproduct, it comes through Las Vegas. When the economy was booming, there was a bunch of material inbound. That's all disappeared.
Question: How has the recession affected the business?
Answer: Hugely. We invested $7 million for the railroad track to bring fuel in and when the economy tanked, demand for fuel evaporated so you have no way of repayment of debt. So we did what everybody else does. Cut labor expenses, do all the textbook transitions, take out the light bulbs, raise the temperature, fire the janitor. If you're in a boat, you shed everything that isn't needed.
Question: What are some peculiarities about your transportation business?
Answer: Everything you deal with as a consumer comes in by truck, from medicine in the hospital to diapers in the grocery store. Las Vegas is an island. We manufacture nothing, so everything we use is brought in by truck. So the peculiarity is we're the backbone of the community.
Question: What's happened to shipping costs? Are they up or down? And what drives those costs?
Answer: Shipping costs have gone down. One is competition. Our industry was deregulated. Before, you had to have authority to transport materials. So rates have plummeted and competition is quite high. Two, the price before the fuel surcharge has gone down, but the fuel surcharge brings it up by 33 percent. It's a pass-through. Every Monday it changes with the price of diesel fuel.
We're looking at using LNG (liquefied natural gas) as an alternative fuel source. It's $2.50 a gallon for the diesel fuel equivalent. We think that will put us in a competitive place with energy costs.
Question: How has Pan Western expanded over the past 40 years?
Answer: We were at $40 million revenue at the peak. We rode the magic Las Vegas carpet. As Las Vegas expanded, if you're not a crook or a thief, you get to grow. We got sucked along with the Las Vegas gold rush. We were intoxicated with Las Vegas growth. Bankers, everybody, they were throwing money at us.
Question: What do you enjoy about running a shipping and transportation company?
Answer: The challenges. Right now it's the ability to go through and repay people. The fun part is we're still here. I call it liar's poker. Everybody's in a bad way. There's some uptick because property values have decreased and people can afford to come here. There are good changes coming. I just hope Las Vegas Valley will cut its fixation with gaming and look at the longer-term stability of manufacturing. We should all put our arms around Nellis (Air Force Base) and give them a big wet kiss. We need politicians to look at long-term survival. They fought Yucca Mountain. Yucca Mountain would have been a $70 billion build-out. Say that slowly - $70 billion.
Question: How many employees do you have? Are you hiring?
Answer: We have about 65 employees and we're always hiring. We have about a 20 percent turnover in truck drivers.
Question: What do you want from an employee?
Answer: Loyalty. It's contract versus covenant. Loyalty is you do what the job requires, not just what you get paid to do. Marriage is a contract and they do the minimum. In a covenant, I change the baby's diaper because it needs to be changed.
Contact reporter Hubble Smith at email@example.com or 702-383-0491.