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Executive Interview

AMN Executive Interview With John Amalfe Of Momentum USA

John Amalfe is the CEO of Momentum USA Inc., a privately held manufacturing, distribution, sales and marketing company headquartered in New Jersey. Momentum’s core products are brakes, cabin air filters and exhaust. John is the third generation Amalfe now running this multi-national company that was started in 1945 by his grandfather, uncles and his father in a one-bay garage in Elizabeth, New Jersey.

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John Amalfe is the CEO of Momentum USA Inc., a privately held manufacturing, distribution, sales and marketing company headquartered in New Jersey. Momentum’s core products are brakes, cabin air filters and exhaust. John is the third generation Amalfe now running this multi-national company that was started in 1945 by his grandfather, uncles and his father in a one-bay garage in Elizabeth, New Jersey. A fourth generation of Amalfes are now actively involved in the family business. Like most entrepreneurial family businesses, John started as a very young boy after school and summers doing various jobs – from changing tires in the retail installation shop, unloading tractor trailers of tires and sweeping the floors. He truly learned the automotive aftermarket from the ground up. After an education at Saint Peters College studying finance, Amalfe started full-time with the family business in 1977, eventually succeeding his uncle as the CEO of the company.

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What are the most significant challenges an independent faces today amongst the rapidly changing face of the aftermarket?

I could give you the “cliché” answers, parts proliferation, eroding margins, DSO, consolidation etc. All those remain a part of the story yet we as an independent must operate with more efficiency, speed to market, providing creative solutions and offering differentiated solutions for every customer requirement. This, we believe, is one of our strengths that has been one of driving factors to our growth.

Over the years the North American automotive aftermarket has become a global market and as an independent company we must face this challenge and be able to have a global reach in everything we do. Having a very efficient “landing spot” for our global procurement has certainly provided us with the ability to compete in those areas. Our North American manufacturing must build a world-class added value product that can arrive at our customer just in time to help reduce the challenges of proliferation of parts in our aftermarket.

What differentiates Momentum from other companies you compete with today?

First, we, like many of our end-user customers are independent (we are them) and having started on the installation side of the business we have an acute understanding of the issues and factors that are important to them and allow their businesses to run smoothly and profitably. Second, we are very proud of not only being an independent going on our 73rd year, but also one of the few 100 percent American-owned companies with manufacturing entities in U.S. and Canada, which is advantageous when volatile global issues cause delays in product delivery.

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In addition, we have developed a culture of being nimble, flexible, creative, and fast, which is to say Momentum is uniquely qualified to support any customer segment or customer requirement.

Tell us more about the Momentum Companies.

We have a brake pad company located in Cambridge, Ontario, Canada, which is just east of Toronto. We continue to make great strides in this area and are very proud that we were one of the first (if not the first) companies to successfully launch a commercially accepted 100 percent copper-free brake pad. Many larger conglomerates have not yet done what we accomplished a year or two past.

To that, we continue to develop many unique formulas using newer composites, which will allow Momentum to lead in this critical area of brakes.  AutoPartSource, located in Richmond, Virginia, with a satellite location in California remains a strategic arm, which is our distribution, global procurement, light manufacturing, assembly and is also is headquarters for our world-class leading Cabin Air Filter division.

Lastly, since 1987, we have owned and operated Original Exhaust Manufacturing in Hopkinsville, Kentucky, where we make welded assemblies and various other exhaust manufacturing. Finally, we continue to look for strategic acquisitions that complement the Momentum vision and core products that we manufacture here in North America.

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Where do you see Momentum in the next 10 years?

My business partners, who are also my cousins all feel confident and are excited about how we have and continue to position Momentum to compete not only today yet most importantly structured to be fluid for the ever-changing aftermarket landscape.

As was mentioned, our fourth generation are learning, growing and becoming more competent leaders within the Momentum companies, this provides myself and my partners great comfort knowing our family company will not only sustain yet is poised for even greater growth in the coming years. Momentum will continue to be a world-class North American manufacturer of friction, filtration and exhaust focused on partnering with key customers to leverage our added value products in the market place.

Blending our manufacturing capabilities along with our global reach to procure anywhere in the world with a highly efficient landing spot for distribution in Virginia gives us a unique offering to provide multiple products just in time to our customer to keep inventory turns high and obsolescence low.

As a family-owned business that now has four generations involved, what are the key characteristics of your company culture that you feel derive from being family owned and operated?

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Our culture was created and started by my grandfather. Every family member who chose to come to work at the business checked their ego at the door. It was, and always will be, about teamwork to achieve a common goal. We all looked at this as more than a job; it was a family journey to follow the vision that our grandfather started. We start every day with perfection in mind to take care of our customer. Family entrepreneurial companies must be quick on their feet in making decisions, block and tackle better than the competition in execution to the customer and carry a passion every day that creates the energy in the company that is needed to be successful against some very large talented competition. This all may sound like a cliché but for a family business it is part of your everyday survival kit.

Private equity has made some pretty big plays in the aftermarket in recent years. Would you ever consider selling into PE in order to meet some of the ambitious growth goals you mentioned earlier?

No. We are 100 percent committed to keeping our business private and family owned as we are blessed to have a strong balance sheet with very little debt and in most cases we are able to fund our investments and acquisitions via internal money. Every family business must decide what kind of strategy to have. Either you build to sell by strengthening your balance sheet and preparing for a sale or you build with a long-term vision and plan. We choose the latter. We have young family members who are learning and poised to continue to carry the torch for the Amalfe family. I hope to see our 100-year anniversary down the road.

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You mentioned global procurement. Can you clarify this a little further since you also talked about being a 100 percent American owned entity with manufacturing in the U.S. and Canada. Tell us a little more about your footprint.

We have been operating an exhaust company in Hopkinsville, Kentucky, for more than 25 years now. Our brake pad factory is located outside of Toronto, Canada, distribution along the Eastern seaboard and master distribution in Richmond, Virginia. We are currently investing in further manufacturing which will be located in Richmond too. Therefore, while we do import some products we produce a significant amount in North America and as noted, [we have] plans to expand our North American manufacturing footprint. Our two core products are friction and exhaust and these are both manufactured in North America. Exhaust in Hopkinsville, Kentucky, and Friction in Cambridge, Ontario. We complement our manufacturing with our ability to globally procure ancillary products for a stronger overall program offering. Our long-term strategy is to continue to enhance our North American manufacturing through acquisitions and introduction of complimentary products.

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