Rihm Kenworth, one of the biggest truck dealers in the Twin Cities, is expanding by building two new suburban sites and will move out of the University Avenue location in St. Paul where it’s been for nearly seven decades.
The new facilities will allow the company to serve more customers and build revenue, said Kari Rihm, the company’s owner and chief executive.
“If you compare it to a restaurant, we’re going to be able to turn the tables faster,” Rihm said.
The move comes after Rihm earlier this year bought another sizable Midwestern family-owned trucking firm, Red Wing-based Lawrence Nationalease. The deal added 15 service locations in Minnesota, Wisconsin and South Dakota, bringing Rihm’s total to 21.
The truck dealership’s growth defies industry trends at a time when market conditions are soft for big rigs. Lower values for used trucks have affected the dealership, Rihm said, and it has relied more heavily on its service business as a result.
“We’ve lost plenty of money because the value has dropped, but we’ve been able to counteract those losses with improvements in other areas,” Rihm said.
Sales of parts over the past six years have increased 75 percent, and service sales have increased 120 percent. J.B. Rihm, Rihm’s son and a vice president of the company, attributed those numbers to an increase in service stalls and the hours they are open.
Kari Rihm took the leadership role at the company after the death of her husband, John, in 2010 following a short battle with brain cancer. The firm was started by John’s grandfather in 1932 and, in 1949, became the first dealer for Kirkland, Wash.-based Kenworth east of the Mississippi. It is now one of Kenworth’s oldest, continually operating dealers.
But after her husband’s death, Kari Rihm had 180 days to pitch a business plan to Kenworth in order to remain a dealer or she would likely have been forced to sell it.
“I knew a little bit about what was going on within the company at that time, but it was minimal,” she said. “The one thing I was real certain on was that I did not want to sell something that I didn’t understand the value of. [The question] wasn’t the present-day dollar value of the company. It was: What is the value to the customer base, to the employee base, to the community, and what is the potential of the business?”
Under her leadership, Rihm Kenworth’s annual new-truck unit sales have tripled. In addition to opening new service locations and the Lawrence acquisition, Rihm also created the company’s human resources department and bulked up the sales team. “We are beating the odds by adding more salespeople and getting more business around the country,” she said.
The Minneapolis-St. Paul Business Journal lists the company as the third-largest woman-owned business in the Twin Cities, after Minnetonka-based Carlson Cos. and Smead Manufacturing Co. of Hastings.
“Everyone in the room remembers you because you’re the only girl in the room, not because they know your name,” Rihm said. “Even last week, a longtime customer came up and asked what do I do at Rihm. And I said ‘I’m the owner,’ and he goes, ‘Oh, you’re the owner?’ ”
The company has been based at University and Cleveland avenues in St. Paul, just a few blocks from the border with Minneapolis, since 1949. But later this year, a 68,000-square-foot dealership it is building at Concord Boulevard and Armour Street in South St. Paul will become its new headquarters.
Rihm Kenworth recently also broke ground on a 75,000-square-foot facility near Hwys. 610 and 47 in Coon Rapids.
J.B. Rihm said the firm plans to hire as many as 50 to 60 new employees when the construction projects are completed. He said the new facilities will help them recruit additional technicians.