Challenges and Opportunities

Ronny Bruell

This is the story of how a refugee family built up a New Zealand based multinational company.

It was on a crisp spring day in Vienna, Austria in April 1938 that Fred Bruell, a Czech box maker, married Lilly Rosenblum, a dress designer.   Only immediate family members were present at the ceremony and the celebrations that followed were subdued, for Austria had recently been annexed by Nazi Germany and gatherings for any reason, particularly Jewish gatherings, were forbidden.  Both families were of humble origin.  Fred’s widowed mother had brought up four children through the depression years.  Before he was 30 he was familiar with starvation, imprisonment and statelessness.

There was only sufficient food for four days in the week, on the other days the family starved.  In winter Fred shared one pair of boots with his brother; when one went to school, the other remained at home.  Fred spent six months in an Austrian jail as a result of his underground anti-Fascist activities.  The local Communist leader also threatened his life.  He became stateless when he joined the flood of refugees fleeing the Russians and/or the Germans in the pre-Second World War carve up of Central Europe.

Lilly’s father as a bespoke tailor.  The family had emigrated from Poland to escape the infamous pogroms of the nineteenth century.  By marriage Lilly became a Czech citizen and although she and her family had affidavits and permits to emigrate to the United States, her marriage to a Czech national prevented this, at least for the time being.  Her immediate family, however, did emigrate.

The newly married couple returned to Brno, Czechoslovakia, where they lived for a few months.  In September 1938, when British rime Minister Chamberlain made a pact with Hitler to give up the Sudetenland, they were forced to leave, but they had no visas for any other countries.  Although they were citizens of Czechoslovakia, weekly permits were necessary to live as Jews in their own city, until visas could be obtained although no one knew from where.

When it became inevitable that Hitler would invade Czechoslovakia, the Social Democratic Party in which Fred was active organised ‘special’ transport to take those who would be on the Nazi ‘wanted’ list to England.  Wives and families were to follow.

Fred was in the first transport and duly arrived in England.  The second transportation never took place for Hitler, in the meantime, invaded Czechoslovakia and immediately closed all borders and foreign Consulates.

Lilly was always a determined and resourceful woman, one who did not take ‘no’ for an answer.  If the borders could not be crossed legally she would cross illegally in order to join her husband.  To do so she had to make contact with the British Consulate in Poland which was still operating.  She travelled to a small border town where she made contact with the Israel Kultusgem (Jewish Congregation) which was assisting hundreds of people, with money and contacts, to cross the border illegally each week.  With only a hand satchel containing the most basic personal possessions she attempted to cross the border.  She was caught three times, twice by the Poles and once by the Germans.  It was at her last arrest that rifle shots were heard in the distance.  Her guards were distracted and ran to investigate.  Lilly ran faster, the other way, across the border into neutral Poland and eventually joined her husband in London.

In England they both worked for the Czech Refugee Fund, an organisation set up to assist Czech refugees through resettlement programmes in Canada and Brazil.  They applied for visas to emigrate to Canada and after several months were told that they had been granted visas, but not for Canada, but for a country they knew very little about, a country called New Zealand.

After many weeks of sailing through the submarine infested waters of the Atlantic and Pacific they finally arrived in Auckland in August 1940, among the last of the European refugees.  Lilly took one look at Queen St and would readily have gone back to Europe.

They soon settled in to a flat in Grafton and Lilly almost immediately found employment as a designer with Classic Manufacturing Ltd.  Fred, after operating a dairy for a short time, became a supervisor and later factory manager with Johnston Cardboard Box Co. Ltd.  Fred was always an innovator and although he had been rejected by the N.Z. Armed Forces because he was not British by birth, he was determined to play his part in supporting the war effort.  He designed and developed a process to waterproof the ‘lousy’ locally produced cardboard without the usual chemicals.  This helped keep a hungry Britain supplied with New Zealand liver (previously shipped in tin cans), and enabled troops to keep vital communications equipment dry during wet landings on Pacific beaches.

It was during this time at Johnston Cardboard Box Ltd. that the concept of starting his own business began to evolve.  He had no capital, having arrived in N.Z. with a loan of two hundred pounds from the British Government, no premises, and a limited technical knowledge, but he did have the essential ingredients for success; enthusiasm and a positive mental attitude.

Always fascinated with the process of metal forming he began experimenting with pieces of metal and in 1942 formed a part-time company F. & L. Bruell Ltd., in the basement of the flat that was rented near Greenlane.  After a day, and sometimes most of the night at Johnston, Fred would start work at his own little business, working into the early hours of the morning.  The name of the company was subsequently changed when it became necessary to find a brand name short enough to fit on the head of the first product – drawing pins – six million of them.  “They were terrible.  We lost money and I was not proud of them, but we learnt a lot.  The second six million were a lot better” wrote Fred.  REX was born.

REX Manufacturing Co. Ltd. operated throughout the war years as a part-time business, making pressed components for the war effort; parts for walkie-talkie radios, stationery, hardware and other componentry.

At the end of the war Fred Bruell became self-employed and for the next 42 years the company expanded, eventually developing into a multinational, multi product organisation, one of the 50 largest in New Zealand.

In 1946 Fred was joined by another refugee from Austria, Joe Spitzer, an association that lasted for 30 years until Joe’s untimely death.

A small shop was leased in Greenlane Road as the fledgling company had already outgrown the family basement.  The company continued to expand in a market still suffering the shortages created by war.  Raw material was almost impossible to come by, particularly steel and tin plate.  If it had not been for people such as Ian Harvey of Alex Harvey and Sons Ltd., who sold to REX the ‘cover sheets’, the protective outer sheets wrapped around each pallet of raw material, the Company may never have survived.

New products were being constantly added to the product range with a heavy emphasis on metal toys.  Lorraine, the youngest of the Bruell children, was quick to understand the initial problems of production and after seeing a new prototype toy she asked “Daddy, can I have the first one you make…no, the second one.  The first never works!”

In 1948 a new company, Paramount Distributors Ltd., was formed to handle the distribution of a growing product range.  It was also in this year that REX made its first export shipment of toy components to Australia, possibly the first production engineers to do so.  However, the bureaucracy was horrific:  no one could understand why a small manufacturer wanted to send his products 1200 miles across the Tasman:  no one could understand the benefits of international trade:  no one, except this budding entrepreneur who would have to wait another 14 years before export was accepted as being essential to the health of any manufacturing organisation, let alone New Zealand.

It was in the early 1950s that disaster struck.  The Korean War caused a drastic shortage of raw materials.  Only essential products were allocated metals like steel and tin plate, and toys most certainly were not an essential product.  Half of the staff of six were women who depended on their employment with REX for the livelihood of their families.

It was Lilly Bruell who came to the rescue after she had determined that each female employee could operate a sewing machine.  Using her training as a designer, she designed on the kitchen table at home a range of children’s clothing based on American fashions.  The range was enthusiastically received by the retail trade.  It was the beginning of a dynamic business career which she combined with the upbringing of three children.  The female staff at REX had a new employer, Playnit Ltd., a company which developed into one of the most successful in New Zealand.  Playnit in the years to come produced twice yearly a range of ladies fashion wear, sportswear and beach wear under the “Viva Capri” label.  Its products were sold not only throughout New Zealand, but also to Australia, Hong Kong, Thailand, Singapore and Fiji.

The Bruell family learnt two important lessons from those traumatic days of the early 1950s:  first, never to rely on any one product or product group, one type of raw material, one customer, one supplier, one market or one staff member.  Second, it is an indictment on the ability of management to make innocent staff members redundant because of lace of work.  In 45 years of Bruell family management, no one was ever made redundant at REX.

Our family life must have been different to most of our friends.  Each morning we woke to the aroma of what would be dinner that night.  As children we came home from school to stay with friends and neighbours until mother returned from a day’s work at Playnit Ltd.  Mother continued work late into the night designing, cutting and grading on the ‘multi purpose’ kitchen table.  Holidays were often spent on farms, or with Fred’s mother Helen, who had recently arrived from London.  But these small sacrifices were worth the joy, pride and satisfaction in knowing that our family was contributing to the development of our country.

The years ahead were filled with challenges and opportunities.  Diversification became the name of the game and REX introduced a strategy of rapid diversification.  Toys became less and less important, componentry became the mainstay of the rapidly growing Group.  With the introduction of black and white television REX became the major supplier of the chassis and brackets that form the foundation of a product.  Components for washing machines, refrigerators, motor vehicles and lawn mowers were produced by the millions at successive factories in Vincent St. and Federal St. alongside the catalogue hardware lines of builders and cabinet makers.  REX developed new agency lines, ironing tables from England, hinges from India, swim goggles and flippers from Australia, and introduced to New Zealand foam plastic from Germany.

REX was fast outgrowing its existing premises and in 1957 a property company, REX Properties Ltd., was formed to acquire four acres of land in Otahuhu and to erect a factory.  The following year these premises were doubled in size.

In 1960 a number of important decisions were made.  Ronny, the eldest son, had completed secondary school education.  Where to now?  Fred, who never minced his words, laid it on the line quite simply.  “If you want to be a vet, be a vet and I will be happy to put you through Veterinary College.  If you want to go to University, fine, and I will support you there too.  If you want to join the family business that is OK by me too, but just remember one thing.  The day you walk through the front door of REX forget that I am your father.  If you succeed it will be because of your own ability, not because you are the boss’s son.”  And so, ‘fatherless’ Ronny joined the Company as an office boy, ran more messages, licked more stamps and swept more floors than any other.  In those early days being a clerical worker at REX did not mean your duties were restricted to the office and that your hands never became dirty.  Hand assembly, factory duties and machine operations were an essential part of everyone’s job, including the boss.

The Company was growing and prospering, but like so many rapidly expanding companies the richer the Company became, the poorer the family was.  Every time a new machine was purchased or a large shipment of raw material was needed, it meant yet another mortgage on the family home.  One day in discussing this problem with the family friend and lawyer, the late Louis Phillips, he suggested a meeting with a young accountant, Lew Ross, later Sir Lewis Ross.  The outcome of this meeting was that the five private companies, production engineering company, a distributor, a clothing manufacturer and two property owning companies were amalgamated into a Public Company to be known as REX Consolidated Ltd. and a listing was sought on the New Zealand Stock Exchange.  Truth newspaper described this move as a ‘strange marriage’.  Lew Ross became the Company’s Chairman, the first of many Chairmanships in a distinguished career, a position he held until his retirement in 1986.

The REX group relocated all companies to new premises in  Otahuhu, next door to one of its major customers, Dreco – later Atlas Majestic Industries Ltd.

Peter, the second son in the family, had decided on leaving school to become an engineer and joined the old established engineering firm of Eric Paton Ltd as an apprentice toolmaker.  Ronny had been promoted from office boy to costing clerk and was then responsible for establishing a purchasing department and became the company’s first purchasing officer.

At last export was being recognised and accepted as vital to the New Zealand economy.  Under the then Minister of Overseas Trade, Rt. Hon. J. R. Marshall, export incentives were introduced to encourage and motivate manufacturers to sell their products and services overseas.  REX did not waste time.  They commenced a vigorous and determined campaign to sell their products world wide.  Apart from the valuable financial benefits export also ensured longer production runs and hence, lower costs, and took reliance away from a fickle New Zealand economy.  Fiji, Australia and South East Asia were the initial target markets.  Competing against the low cost countries of Asia meant that REX products had to be sold not so much on price, but more so on quality.  Quality was paramount.  No expense was spared to ensure that the products being supplied were only of the highest quality.  REX was a name synonymous with quality products.  In 1965 Ronny, who had developed a keen interest in export, became active in Jaycees who were planning the first non-government Trade Mission to Fiji.   Together with nine other budding exporters, including Eric Svirskis and George Klein, these Jaycees represented 50 New Zealand manufacturers with considerable success, and much to the amazement of many, the venture was financially profitable.  One manufacturer who never doubted the ability of New Zealand companies to sell products overseas was the dynamic food entrepreneur, Frank Briess, who daughter Claire would in 1973 marry Peter Bruell.

All parents have ambitions for their children and those of Lilly and Fred Bruell were that, before they settle down, they should travel as widely as possible.  In 1966 when Peter had completed his apprenticeship and obtained his N.Z.C.E. and Ronny his Diplomas in Business Administration and Credit Management A.N.Z.I.M., they left for extensive travels in U.S.A., Eastern and Western Europe, Scandinavia, Israel and Asia.  Then the two brothers decided to work for the company back home.  Attending Trade Fairs and Exhibitions and travelling to potential principals throughout the U.K., they negotiated manufacturing licensing agreements with several companies, agreements that would propel REX into totally new and lucrative fields of manufacture.  Back home their parents were not sitting idle.  In late 1966 REX acquired the Auckland Plastic Co. Ltd. and subsequently changed its name to REX Plastics Ltd.  The materials handling equipment and conveyor division, REX Industrial Equipment Ltd., was formed in 1968 and a year later one of New Zealand’s oldest companies, John Edward Butler N.Z. Ltd., was acquired.  This old, established Company which had been operating for almost 100 years with its reputation for fine products had recently specialised in the manufacture of Britax car safety belts and seats.

Exports continued to play a most important part in the Group’s development.  By year end the Company was selling its products to 25 countries.  In June 1969 REX was awarded the Tr4ade Promotion Council’s ‘Export Award’ for “Outstanding Achievements in International Trade.”

Research and development is a vital ingredient for success in any manufacturing organisation, and REX placed a heavy emphasis on the development of new products and processes, new techniques and the use of new materials.  Growth in sales, production and profit necessitated an almost continuous building programme.  The company now employed over 390 staff members.

During 1970 the companies in Wellington and Christchurch which acted as the Group’s selling agents were acquired as wholly owned subsidiaries.  The new decade began on a euphoric note when REX was awarded the New Zealand Society of Accountants’ Aware for the best public company Annual Report.

Anticipating the potential for trans-Tasman trade and  realising the inevitability of some form of trading relationship between Australia and New Zealand, REX expanded into Australia by purchasing the Melbourne based subsidiary of an Australian public company which was subsequently renamed Rexport International Aust. Pty Ltd.

The success of the Australian operation was such that it prompted further overseas expansion, for over the next 10 years subsidiary companies and divisions were established in many countries.

Together with expansion into Australia and Asia, a determined effort was being made in other parts of the world.  Ronny and Peter opened up new markets in Africa, in Kenya, Uganda, Tanzania, Zambia, Malawi, Mozambique and Mauritius, while Fr4ed cracked the South American markets of Chile, Peru, Ecuador, Venezuela and the Caribbean.  Each senior executive in the Company was responsible for a particular country or area.  Writing letters does not generate orders; the only successful way to obtain business is by personal visits on a regular basis.

Meanwhile, back home the company was continuing its domestic expansion, for international trade can only be sustained by a sound and profitable domestic market.

Following the successful negotiations of a manufacturing licensing agreement with Swiss principals, REX Syma System N.Z. Ltd. was formed in 1976 to manufacture a range of display systems, exhibition stands, showcases, domestic and commercial furniture.

In 1979 Fred Bruell, now aged 69, stepped down as Managing Director of the REX Consolidated Group, but remained an Executive Director and Deputy Chairman.  His workload, none the less, was not reduced as he had hoped, for although the day to day operations of the Company were no longer his responsibility, outside commitments made him ore active than ever.  This was the year of the Erebus disaster and as a Director of Air New Zealand the tragedy meant endless hours of meetings and briefings.  Few people can appreciate the amount of time, commitment and soul searching that the directors, management and staff of the airline devoted in the aftermath of Erebus.  Hearings, inquiries, court cases, appeals, restructuring and the investigations kept Fred Bruell and his colleagues flat out seven days a week.

Ronny and Peter took over as joint Managing Directors, the former responsible for Marketing, Export and Administration, the latter Technical and Production.  Jointly they shared the financial responsibility.  They had been well trained.  Both had been born into the company.  Together they had over 30 years experience and most importantly, they worked well together and were very close, a most important asset in the lonely position at the top.

Shortly before these significant changes took place Lilly Bruell had retired.  The only way to achieve this retirement was to close Playnit Ltd.  The Company was immensely successful and profitable but the family and the board knew that as long as Playnit Ltd was around Lilly would devote her heart and soul to it.  Because of this and not wanting to sell the now well known and well respected label ‘Viva Capri’, Playnit Ltd. was wound down and finally closed.  One of New Zealand’s most successful ladies sportswear manufacturers left the industry while at the top.  No one could ask for more.

Lilly’s retirement did not however mean that she was no longer involved in the company.  Few people will ever appreciate the invaluable contribution she made to the REX Group over its 45 year history.  She was of course a foundation Director in the 1940s, and was responsible for the introduction of many new products and techniques over the years.  The major decisions of the Group were not made in the board room at Head Office, but at home around that most versatile kitchen table, at nights and in the weekends.  It was Lilly with her sound common sense and a deeply humane approach to all problems who also had the ability to bring a bunch of over-enthusiastic entrepreneurs down to earth.  She was undoubtedly the backbone of REX Consolidated Ltd.

In 1980 REX acquired Simon Metal Products Ltd., a Wellington based manufacturer of ferrous and non-ferrous forgings, as well as car safety belts.

An agency company, REX Agencies Ltd., was formed to take advantage of the Government’s liberalisation of the import licensing system.

By 1984 REX were importers, exporters, distributors, manufacturers and builders.  Staff in excess of 650 was housed in over 300,000 sq ft of buildings, there were 20 subsidiary companies to the Group based in five countries.  Sales exceeded $50 million including exports of $5 million, no mean achievement for a family that started from scratch 45 years previously.

At times all five family members worked in the business.  Lorraine joined the secretarial staff in the late 60s for a few years, but in spite of working in close proximity to each other there were never any family feuds, in-fighting, arguments, disagreements or ill will.   Each had a job and did it to the best of their ability.  Fred, who was undoubtedly the driving force, was quick to criticise but could also take criticism and if warranted would change a policy, decision or technique.  The family was a team and this team spirit was reflected and encouraged throughout the whole organisation.  From the beginning the family worked with people.  No one was too insignificant, or performed too humble a task, not to warrant a word of encouragement, a slap on the back, or some advice, or help with a personal problem.  This philosophy ensured that REX enjoyed excellent labour relations and industrial harmony.  Everyone has common needs irrespective of whether they wear a collar and tie or blue overalls.  Labour problems were settled in frank but friendly discussions rather than by confrontation.  Ideas and suggestions were encouraged and welcomed from all the staff and some of the best came from the factory floor.  REX was a family company, a family of over 650 people.

To ensure international competitiveness and to maintain domestic market share, in spite of having to compete with the increasing volume of imported goods, REX continually updated its manufacturing and engineering plants.  It had the most modern production and engineering facilities in New Zealand if not Australasia.  REX was the first to introduce many new sophisticated and innovative production techniques and technologies.  Much of the plant was fully automatic and computer controlled.  Robotics became increasingly important in recent years to handle the large volume production runs.  Thorough staff training was essential and REX had its own apprentice school and cadet training schemes where tomorrow’s tradesmen and executives received in-depth practical schooling.

In a large ultra modern precision engineering plant perfect housekeeping is an absolute necessity – products manufactured to an accuracy of thousandths of an inch required perfect working conditions.  Spotless factories were demanded and housekeeping had to be superb.  It was not uncommon to see Fred Bruell pick up a broom and clean up in a factory, he was after all by his own self-admission ‘a perfectionist’.  The standards of cleanliness at REX amazed many overseas visitors who believed that engineering plants had to be dirty!

The mid 1980s saw the Bull Run on the share market in full swing.  New companies were being formed every week in a climate in which it was possible to float a lead balloon.  Other companies were being taken over and swallowed up almost on a daily basis.  REX was asset rich as a result of its conservative financial policies and that made it an inevitable takeover target. The Group’s chairman, Sir Lewis Ross, warned the directors of this possibility, and sure enough in early 1984 the company was subjected to a raid on the share market.  After careful deliberation it was decided to join with a large New Zealand public company, Cable Price Downer Ltd., with whom it was hoped staff could work, rather than risk the fate of an unfriendly takeover.  REX merged with C.P.D. and the honeymoon lasted two years.

The Bruell family had been their own bosses for 45 years and it soon became obvious that enough was enough, and that it was time for a well earned rest.  When the opportunity arose at the end of the 1986/87 financial year, the C.P.D. Board of Directors accepted the resignation of Fred, Ronny and Peter Bruell who retired from the Company, which for almost half a century had provided the family with its challenges and opportunities.

The Bruell family are proud to be recognised as innovators and entrepreneurs, leaders not followers.  One of their guiding principles has been to have a positive mental attitude, a philosophy that has guided them through many difficult situations.  Great believers in serving the community they have participated in many outside activities.

Fred Bruell was for 20 years a Director of Consolidated Metal Industries Ltd., a leading New Zealand public company, and for six years was a Director of Air New Zealand.  He was for many years a Council Member of the Auckland Manufacturers’ Association, as was son Peter several years later and he was elected President in 1976.  Parallel with his activities in Auckland, he was Chairman of the New Zealand Manufacturers’ Federation Export Sub-Committee and Chairman of the Immigration Committee.  In conjunction with other councillors of the Auckland Manufacturers’ Association he founded the Export Institute of New Zealand and was its first President.  Ronny also served on the Executive.  Fred served on the Manufacturing Development Council from 1972-78 and was a Director of the New Zealand Export-Import Corporation for over four years.  He represented the New Zealand Manufacturers’ Federation at N.A.F.T.A. (New Zealand – Australian Free Trade Agreement) talks in Canberra, Australia.  He was also a member of the Advisory Council to the Export Guarantee Office (E.X.G.O.).  In 1968 he was leader of a Trade Mission of New Zealand Manufacturers to South East Asia and in 1975 was a member of the New Zealand Government’s Economic Mission to Eastern Europe.

REX Consolidated Ltd. continued as a subsidiary of Cable Price Downer Ltd.  It was eventually split and disposed of to numerous parties, and finally closed its doors in December 1988.

About the Author

Ronny Bruell was educated at Auckland Grammar School and Selwyn College where he was a foundation pupil.   His tertiary education was gained at the Auckland Technical Institute where he studied Business Management.  He was among the first recipients of the Diploma of Export (Dip.Ex.), having completed his studies with a thesis entitled ‘An Analysis of the Development of a NZ Manufacturing Exporter’.

He has over the years been an active member of Habonim, Jaycees and Toastmasters.  An accomplished public speaker, he has competed in numerous speech and debating competitions with considerable success.

First published in  “Identity and Involvement: Auckland Jewry, Past and Present” edited by Ann Gluckman published 1990 by Dunmore Press