TOLEDO, OH —
Every other week, aftermarketNews.com offers an interview with a high-profile individual in the automotive aftermarket. We give executives free rein to express their views on anything from the state of their corporations to recent legislative news to future trends in their niche markets. Here you see what matters to the newsmakers themselves.
Our latest edition of “Executive Interview” features John Washbish, president – Customer Relationship Management, Dana Automotive Aftermarket Group (AAG). As president of Customer Relationship Management, Washbish is responsible for all of Dana Automotive Aftermarket Group sales, marketing and product data management, reporting directly to Terry McCormack.
Washbish joined the Dana team in 1998 with the acquisition of Clevite Engine Parts and since has been president, Clevite Engine Parts and most recently, president of the Dana Automotive Aftermarket Under Hood Group.
He has served as president of the National Engine Parts Manufacturers Association, chairman of the AWDA Young Executive Society and recently spent four years on the board of directors for MEMA. Currently, he is the past president of the automotive sales council, vice-chairman of the Manufacturers Advisory Council of AWDA and a board member for the Heavy Duty Manufactures Association.
Washbish recently spoke with aftermarketNews.com about his new role as president of customer relationship management, as well as the latest developments in the pending sale of the Automotive Aftermarket Group.
Q: What are the latest developments on the sale of the Dana Automotive Aftermarket Group (AAG)?
A: The month of January has been enjoyably hectic, as the entire management group has been developing the offering memorandum, which we hope to have ready for the street by the end of the month. It’s a beautiful document, and it reflects what a truly exciting company we have.
We will start distributing those memorandums the first week of February. Probably by March we will begin making various management presentations.
We’re really pumped up about it. There has been a flurry of activity, with people lining up in Toledo, Ohio, saying, ‘I’d like to take a look,’ which tells us a couple of things. First, it indicates there is a level of enthusiasm and interest in purchasing the Automotive Aftermarket Group. Secondly, I think it supports some of the things that we’ve been hearing over the last few months – that there is a lot of money on the sidelines, and people are ready to put it back into play. We’re very delighted and encouraged.
Q: What effect has talk of a potential sale had on the Dana AAG employees?
A: As you would expect, anytime someone says that something is going to be sold, it is very hard for individuals not to ask, ‘What does this mean to me?’ So, we are dealing with the normal effects of change. But we’ve got a great group of people here. A number of them have been through acquisitions before, so they are familiar with how things proceed and what the outcome could be.
From the very beginning, we really impressed on our people that while ownership of our company may change, our customers always remain the same. That being said, if we keep the customers as our central focus and everything that we do is for the customer, we will be in great shape no matter who the owners are. It’s about servicing the market and servicing our customers.
The customer-centric keys that we focus on are: fill rates, cycle times and coverage. Our fill rates have been, and continue to be outstanding. Our cycle times are the best in the industry. And we continue adding new numbers to our coverage each and every day. I would offer this challenge to you: If you want to know how this has affected our employees, call our customers and ask them. They will tell you that our people are just as focused, just as dedicated, just as good as ever before. I don’t think you would find one customer who would say that we have taken our eyes off the ball.
We know that anybody aspiring to own something as large as our Automotive Aftermarket Group, before they actually push the money across the table, might just go see some of our major customers. Since we know that this is what ultimately is going to happen, the best way that we can ensure our continuation is to know that our major customers will say things like ‘great company,’ ‘great people,’ ‘great brands.’ We understand that no matter who the owner is, the customer is what it’s all about.
Q: Has the way Dana AAG conducts business been affected by a potential sale?
A: Absolutely not. We’re doing business just like always. This week we’re engaged in strategic planning meetings. I’ve had a number of people say ‘Why would you do that when you don’t even know who the owners are going to be?’ We don’t know who the owner is going to be, but we know who the customers are. So we continue to ask ourselves what are the things we have to do to take care of our customers, because those things are going to be the same regardless of who the owner is. It’s business as usual with the Automotive Aftermarket Group.
Q: Can you explain your duties in your expanded role as president of customer relationship management (CRM) for Dana AAG?
A: The position of president of customer relationship management can best be summed up in three words: Customer relationship management. That may sound a little bit flippant, but that’s really what it’s about. It’s all about the customer.
My duties, and my department’s duties, are to make sure that each and every effort we put forth across the enterprise is focused on delivering value to the customer. Each and every path we take is in that direction.
A lot of the job is to continually make sure that the people on our team understand that we’re not doing things just for ourselves, or just in the interest of internal efficiencies. We do things to support our customers’ efforts to deliver outstanding performance all the way down to the professional technician, or on the retail side, to the public.
Q: How have your employees responded to the customer centric re-structuring of the Dana AAG? Is it changing the organization?
A: Yes, it is. Moving the organization to a CRM mindset required a cultural change. We were product-centric and very division-oriented before. But what our people had to learn and understand with CRM, is that customers want a single point of contact with us as a company. At the same time, we have to show the customer that there is good accountability, but with no finger pointing.
So, after our employees understood the reason for a single point of contact and the need for good accountability, we were on our way to our goal, which is to be the easiest company to do business with, not only in this industry, but in any industry. With CRM we can do that. This cultural change that’s taking place is manifesting itself in some real tangibles. But as you would expect, early on there were some bumps in the road.
It was bold of Terry McCormack to have the courage to let us break out and do this. Just consider a guy like me…I was very pleased with my previous position as president of the underhood group. I had roughly half of all the operational responsibility in the AAG, at that time about $1.2 billion. I had our underhood division from front to back, and side to side. I was the quarterback, and I called the plays. I look back now and think of a customer who had a complaint about something on the under vehicle side, and, well, I didn’t care very much, because that division didn’t report to me. So I, too, have had to go through this cultural change.
We initially had some people who said ‘Well, I just really care about what happens to filters. I don’t really care about Beck/Arnley import parts.’ But then folks started to get the feel of it – they recognized that many of our customers don’t just buy one product line. They buy all these different things from us. It’s all about delivering greater value for the customer.
Q: Moving on to the aftermarket as a whole, what do you view as the most important issue in our industry?
A: Same one it’s been for a few years: Collaboration. You print it, you write it, a lot of us say it, but how well are we really doing it?
We have to collaborate as an industry to help one another, help other manufacturers, distributors, jobbers. We all have to harness our power and focus our efforts on the revenue wellhead, which is the person who throws the box away. What are we doing to help the professional technician, and furthermore, what are we doing to recruit more professional technicians?
None of us make any money until somebody puts the part on the car. The rest of this is just support work. We have to wake up as an industry and really get serious about collaborating and making our information easy to get hold of, easy to understand, easy to move from one supplier to another. The more industry standards that we can follow, the better off we all will be.
Q: Collaboration, or lack thereof, has been an issue for some time now. Do you feel things have somewhat improved?
A: I do. I think we all owe a debt of gratitude to AAIA in the efforts they put forth in the area of industry standards. PIES (Product Information Exchange Standard), is a remarkably profound achievement, and we in the Automotive Aftermarket Group worship at the altar of PIES. Five years ago, it didn’t exist, and now virtually everybody is on board there.
Another example is the Partnership Gateway Network, which was developed by O’Reilly and then handed over to AAIA. And I have heard of other initiatives underway that look like they’re headed to a similar outcome. These kinds of things show progress toward the true spirit of collaboration that we need.
Q: What makes this industry unique?
A: At least three things, and the first is almost comical. The automotive aftermarket (including the truck parts aftermarket), is the fourth or fifth largest industry in the world, and we still run it with Stone Age technology. There are actually some folks who still have inventory on cards. Or when you go into a parts house…I know we’ve come a long way in the area of electronic cataloging, but I still see a lot of people flipping pages. I don’t think this is “good” unique, but it sure is unique.
The second thing is … unlike most industries, ours is very application-driven. It’s not like going to the grocery store and getting a can of butter beans. Many of the parts that we sell, as you know, are prescription parts. An engine bearing for a small block Chevrolet, is very much a prescription. John Q. Public doesn’t get up on Saturday morning and say “I think I’ll change my engine bearings.” When the engine breaks, then they say “Uh oh. I better get this fixed.”
And then there’s the unique aspect of our industry that really drives me crazy, the fact that we, as an industry, have conditioned the motoring public to believe that they can take their vehicle to any service shop, anywhere in the U.S., and regardless of what’s wrong with it, we can fix it, have it done today, and do it cheaply.
We’ve probably given too much service to the public and I don’t know exactly how we get that back. We all work hard everyday to have the inventory in the right place. I just wish that all of us could get a better return on the investment we make to meet these expectations, but it doesn’t seem to be happening. As far as I know, these three things make the automotive aftermarket unique.
Q: Back to Dana AAG. What kind of company will the new owners of Dana AAG be getting?
A: I know what they are buying is a world-class outfit. Easy for me to say, but when the offering memorandum comes out, it will describe the number-one brake company in North American, arguably the world; the number-one filter company in North America, arguably the world, and the number-two chassis parts company in North America, arguably the world. Additionally, it will talk about the only foreign nameplate full-line supplier…the only one…that is focused on assisting its distribution partners to get their fair share of the service dealer market. Umbrella’d over all of that is a stable of brands that is absolutely out of this world — Raybestos, Wix, Spicer and Beck/Arnley.
Add to all of that our customer relationship management, which is now supported by a sophisticated systems network, providing a menu of services that includes the finest e-connections to ordering, technical information, product and application data, etc. We think it’s really a dynamite package.
Jack Welch said that if you are going to buy a company, make sure it is number one or number two in its market. All of our brands are number one or number two in their respective categories, and our whole CRM team is blessed and thrilled to be associated with them.
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