It was 1964, and Ernest Hotze, a mechanical engineer who put himself through Oklahoma University working in oilfields, was trying to sell Tennessee Gas Pipeline some large compressors. Hotze worked for Clark Brothers, one of four big compressor manufacturers, and the business was very different from its modem incarnation.
Prices were standard. The difference between one manufacturer and the next often came down to the parts and the salesperson. Tennessee Gas was happy to take the Clark compressors, but it wanted them with Ingersoll Rand-style channel valves instead of Clark's standard poppet valves. Hotze agreed. But neither Clark nor any other provider would produce valves that fit on the necessary schedule. So Hotze took the problem home.
"One of my first vivid memories is as a 12-year-old child with a pair of Vernier calipers, measuring channel valve parts in the living room and calling off the measurements to Dad so he could get a drawing made," said Bruce Hotze, Ernest's son and the current CEO of Compressor Engineering Corp (CECO).
The Hotze family eventually consisted of Ernest, his wife Margaret, seven sons and one daughter. In 1964, three of the boys were old enough to help their father gauge specifications, create drawings and visit machine shops and steel suppliers as he designed and built the necessary pieces to complete the Tennessee Gas order himself.
"The valves were finally assembled at our house. We put them all on a big truck and delivered them to two Tennessee Gas compressor stations. When the compressors were installed the CECO channel valves were installed," Bruce said. Tennessee Gas told Hotze there were plenty of other compressors in their system that could use channel valves and parts. A business was born.
Ernest Hotze worked by day selling Clark (eventually Dresser Clark) compressors and by night filling orders for Ingersoll Rand parts--replacements for the most popular reciprocating compressors in the country at the time. During a time when an original equipment manufacturer could take weeks to fill an order, CECO specialized in fast delivery. "They could call us about 4 o'clock and we would take shipments down to the bus station or the freight company or the airport, and they would have the parts the next day or the following day," Bruce said.
The business was a whole-household affair. The family developed a Sunday ritual of sorting parts--from a box with 30 different components freshly tumbled for smoothness, each family member would collect one or two particular sizes, until the new inventory was organized.
CECO is "the house that Ernie built," said Richard Hotze, the sixth son and president of the corporation, "with the help of his sons, who he considered slave labor." That was no great advantage, according to Ernest Hotze. "He much preferred volunteer labor, because he could double their salary every week, and he didn't have to house them and feed them or pay their medical bills."
Fifty years after that first order, CECO employs around 230 people year-round and 1,000 during the pipeline construction season, across two major divisions, and is still headquartered in Houston. Four of Hotze's sons lead the company: Bruce, second oldest; Richard; Mark, son number four, CFO and head of CECO Pipeline Services Company, Inc.; and David N. Hotze, fifth in line, president of the pipeline division. Their mother still serves on the board of directors at the age of 86, and one Hotze grandchild works at the company, with the possibility that others will follow in the family path.
Several among the second generation of Hotzes grew up working in the shop during the summer and after school. When Richard was in school, CECO's plant was only a few blocks from the Houston private school all the brothers attended, a...