AMN: You’ve been in this new role for about a year now. Can you tell us a little bit about your background and why this role was a great fit for you?
Joe Santangelo: I joined Arnott in September of 2017. I studied electrical engineering in college and have spent my career at both industrial manufacturing companies as well as distribution businesses in the automotive aftermarket. When you look at those mixes, being at Arnott is a great fit for me because it’s an aftermarket manufacturing business that’s highly focused on engineering.
AMN: What is it about the Arnott culture, the company, the products, etc., that really stood out for you?
Joe Santangelo:For me, it was a unique opportunity. When I went through the interview process, the family culture here at Arnott really stood out to me. The second thing that stood out was how important product design and quality is to the Arnott team. Engineering is the nicest building on the campus. It’s very obvious how important quality and product design are here. And I find it extraordinary for us to be an industry leader in the aftermarket, and yet still feel like we’re a family business.
That is something we really try to hold on to here as we grow and evolve – to continue to keep that family culture and small business feel.
AMN: What do you feel sets Arnott’s product apart from its competitors?
Joe Santangelo:Air suspension is a fantastic technology, it really allows for flexibility in suspension design; it can provide a very comfortable ride or a very sporty ride.
From an R&D perspective, it’s a technology that has been around for a long time, but from a modern commercial use, it hasn’t been around all that long. However, Arnott has been at this for quite some time. Our founder, Adam Arnott, is still heavily active in the business. He founded the business in 1989; this year is our 30th anniversary, which by the way, we’re really proud of. We have built up a ton of experience over the past three decades. That’s the first thing that sets us apart.
Another thing that sets us apart is that we work on both new and remanufactured products. That’s something you don’t usually see in our space. We really pride ourselves on filling what I call the perfect spot on that competitive positioning. We offer OE-quality products at a really good value. We design and assemble them in the U.S. As part of our design process, we test everything on our own fleet of vehicles before we launch a product. That allows us to really tune the products so that when you’re driving in the car, you can feel the quality that is Arnott because we have tuned that suspension product – the shock, the air springs – specifically for that vehicle. That’s not something any of our aftermarket competitors do, to our knowledge.
Because we remanufacture products, we see a significant number of OE product failures, and we spend time analyzing the cores to understand why they failed. We know we’re doing something special because we have associates who have previously worked for OE manufacturers, and they’re always impressed by how well we understand the products. I’m always amazed at the knowledge we can get from the failed product. It really gives us insight that we leverage to design a better product.
It’s a real advantage to have that remanufacturing knowledge. It’s a luxury that we are aftermarket, as we get to focus on fixing problems that caused the original equipment to fail. When we are designing our product, we are prototyping it on the vehicle it was designed for, and we can work on making installation easier as well. We’ve got examples where we’ve cut installation down by hours because of different design changes that we’ve made.
We’re really proud of those examples. They show how being focused solely on the aftermarket, and very specifically on-air suspension systems or high-end technology suspension systems, leads to real benefits to our products.
AMN: That’s a great way of saying it, to say it’s a luxury to be aftermarket and the advantages you have being an aftermarket company …
Joe Santangelo:Absolutely. As an OE engineer, you design something on a white sheet of paper, and you can’t easily change it. And then the same engineer comes here and gets to look at the product he designed, in the field, and sees how we can make changes and improvements. So, when I say luxury, truly, that’s how our engineers should feel, as we have the luxury of seeing and understanding OE product failures and being able to fix them.
AMN:So, let’s shift gears a little bit and talk about you as CEO. Now that you’ve had time to settle in to your role, what are some of your long- and short-term goals for the company?
Joe Santangelo:We’re really excited about the growth the company is going through now. Obviously, as CEO my goal is to continue that growth, but it’s really about servicing our customers, it’s about bringing new SKUs to market because this market is growing. It’s going to continue to grow. Air suspension is a technology that is being deployed on more and more vehicles and it doesn’t matter what engine you use, you can use electric, you can use traditional engines. It’s on both. If you look at Teslas, those are on air suspension. We don’t care what kind of engine you have, that shift in the market doesn’t affect us and this is a technology that is more and more subscribed. As a result, we’ve got a lot of product to design over the coming years so that our customers have access to it when they need it. So that’s a big thing for us that we’re working on.
The second thing is, it’s a newer technology… when I say newer, I mean in the past 30 years. It’s really grown in the market over the past 10 years or so. It’s not something that every repair shop is comfortable doing and that’s a very big deal for us. We know that some repair shops are hesitant to do this work and it is going back to the dealer channel, but we think those shops are missing out on an opportunity. In fact, when we are able to work with shops, and help them through our distribution partners, it helps get them educated. It’s a wonderful answer for them, and for us of course, because they are using the parts we’re so proud of.
AMN: Are there any preconceived notions that you noticed customers had, or prospective customers had about Arnott that you feel people need to be better educated on?
Joe Santangelo:Yes. So, I mentioned new versus remanufactured. In the automotive aftermarket, oftentimes remanufactured has a preconceived notion that you do it to save money. Here at Arnott, that is not the case at all. We remanufacture because it maintains factory electronics. It’s not a cost play, and that’s pretty unique. I don’t know of other remanufactured products that are taken to the market for that reason. So, that is a preconceived notion, not necessarily about Arnott but obviously Arnott is affected by that. We try to educate our customers on it all the time.
Then the other preconceived notion is that air suspension is a niche market, which used to be the case, but quite frankly, isn’t necessarily true anymore. And secondly, that it’s too complex. That’s just a hurdle we have to help people get over. It’s not a niche market and it’s only going to continue to grow, and if you can do brakes then you can do air suspension. These are high-end systems that folks are capable of working with and it can provide the repair shop with a really good growth and profit opportunity. So, we try to walk them through that. I don’t know if it is a preconceived notion or just a lack of awareness.
We’re a pretty specialized company in the automotive aftermarket and we’re focused on the air suspension space. We’re really proud of it. Not everybody has gotten to know us as well as we’d like them to yet. I wish we could bring more people to this facility here so that they would really see the amount of pride we have and the amount of passion we put into our design process. It’s just so compelling to see and talk to our engineers, to see the processes we go through and how that leads to a fantastic product that’s designed and made in the U.S., tested on our own fleet, the prototyping we can do here, and the amount of engineering resources we have here. Every customer that we’ve brought through here has been very impressed and usually leaves feeling incredibly excited about our partnership and the supplier/customer relationship.
I think that it’s not necessarily a preconceived notion, but it is a communication point that is so critical for us.
AMN:How important is the “Assembled in the USA” proposition for Arnott?
Joe Santangelo:It’s very important to us. It enables us to make great products because we’re doing everything in the U.S., we have the fleet of cars here, we have the engineers here and we have the engineering equipment here, and we go through our assembly process here as well. It enables us to make high-quality products. So, it’s important from a practical perspective. From another perspective, we’re proud that we continue to do this here in the U.S. because we are able to be efficient and to have high-quality products that people value. Just as we know that our North American customers really value that we assemble our products in the USA, we also know that our European customers value that we have a production facility in the Netherlands.
AMN: How much of a role does customer feedback play in your product creation process or your R&D process?
Joe Santangelo:It’s very important, but I might give a twist to that. I would say the biggest piece of feedback that we get in our R&D process is what the products themselves tell us – I’m referring to cores. Arnott has gotten to look at all those failures over a 30-year period. It has educated us so much on where the failure points are, and what to avoid, and that’s really such a key tool in designing the next generation of products. It’s just so critical to us. That is huge for us from a feedback perspective.
It’s also so important that our customers value our product from an aftermarket perspective so when we are working with our distributor partners on educating repair shops, we always try to get feedback on the installation process, and on how they like to use the product, because we’re focused on the aftermarket. We want to make sure we’re helping them. That the product itself is easy to install, that they see value in it, and that it makes the process easier with Arnott than with product from another company. We are truly passionate about making the best product possible for our customers.