The leaders of the new entity – Bill Burns, CEO of Truck Pride, and Don Reimondo, president of HD America – recently provided Truck Parts & Service with an exclusive interview during the Aftermarket Distribution Summit in Lake Geneva, Wis.
TRUCK PARTS & SERVICE: WHAT WAS THE DRIVING DECISION BEHIND THE MERGER?
Don Reimondo: I think the driving decision, from my perspective, was this ongoing consolidation in the independent marketplace. We needed to look at who our prospects and partners were going to be five or seven years down the road and the impact they will have on the marketplace. Looking at it with that future in mind, we believe there is more strength in the expanded footprint.
This combined membership gives us that from a services perspective. The strengths of the brands in combination make us a more attractive dance partner with the ultimate guy we’re trying to get to, and that’s the guy who throws away the box.
Bill Burns: The other thing is we take a look at what we need to do, and that’s focus on sales and, as Don said, those who literally throw away the box. I understand we [Don and I] both have automotive backgrounds and we tend to focus on that. We felt the real competition that we have is the OESs. We were at a disadvantage by not necessarily having the footprint that they have and the uniformity of product offerings. By doing this, we are joining families, if you will, to be able to compete on that level for the customer and be able to compete successfully. So it seemed to make all the sense in the world.
TPS: FROM A SERVICES PERSPECTIVE WILL THAT MAKE YOU MORE ATTRACTIVE TO THE LARGER FLEETS?
DR: It could be national fleets, it could be regional fleets, it could be national repair associations and it could be establishing a series of regional or national service operations. It’s that whole program put together. So if you want to call it branding and services, it just gave us a bigger template to approach the marketplace. And not only in the U.S., but the U.S. and Canada.
We had a dwindling presence at HD America in Canada, TruckPride has a pretty significant footprint. When you put the two together and look at our map, it’s significant…When you start looking at 700-plus locations in the U.S. and Canada, it’s a significant presence.
TPS: WHAT DO YOU THINK THIS MERGER MEANS TO THE INDUSTRY?
BB: We’d like to think that it’s perhaps the prototypical action that will continue to evolve. At the end of the day, when we take a look at other distribution models – perhaps automotive or in other industries – there is a lesser number of distributors every year. We believe this will be a precursor of what’s going to continue to happen. When we talked about this, we talked about it in the larger sense of the independent aftermarket in general, not just HDA and Truck Pride. We’re hopeful that once we do get down the road on this, the entire model will look that much more attractive to the entire industry.
DR: In order to have an impact on the guy who throws away the box, we needed to have more scale. Today, as a combined entity, we have that scale, we have that presence. There are very few places where you can go in this country and not have an HDA or Truck Pride participant. Whether it’s a service provider, associate distributor or a full-blown member, we have the marketplace covered very, very well.
HDA Truck Pride has 700-plus warehouse distributor member locations throughout North America. The group is led by Truck Pride CEO Bill Burns (left) and Heavy Duty America President Don Reimondo (right).BB: At the end of the day, people will measure you against the dealership network. That’s the standard, if you will. When someone breaks down, they know where to find the International dealer or the Paccar dealer. Literally that’s the measuring stick. We believe we can become that viable alternative to those people.
And, at the same time, with a history of people who understand the concept of service, bring a superior piece to the puzzle because our people are all about service. We believe we absolutely shine compared to the OES channel when it comes to that.
TPS: I KNOW THIS IS A WORK IN PROGRESS, BUT WHEN DO YOU EXPECT TO ROLL EVERYTHING OUT, THE BRANDING, COLLATERAL PIECES, AND EVERYTHING ELSE?
BB: Well, you know we made the announcement effective Sept. 1 that we are HDA Truck Pride. We further made the statement that on January 1 we believe we will be well down the road for the integration and daily management of the two businesses. Over the next three or four weeks, we are visiting five cities to have regional meetings with our members to bring them up to speed on what’s going on and to start giving them a more detailed look at what the combined entity is going to be.
So that’s where our focus is right now. Obviously we’re going to learn a lot from our people, and we hope that they’ll learn a lot of what we’re hoping to do. But we’re thinking throughout 2011, and obviously this a work in process, you’ll see the integration progress through the year.
TPS: YOU MENTIONED THE EASE WITH WHICH AN END USER CAN FIND A DEALER. WITH THE MERGER, DOES IT OPEN UP POSSIBILITIES LIKE A TOLL-FREE BREAKDOWN NUMBER, SERVICES CARD, ETC.?
DR: It’s what we do today, just on a bigger scale.
BB: I think in some manner we both have those things. It’s the challenge now to unify that. Then obviously once you do that, you change the hearts and minds of people who now understand that we are this national entity that they can viably look to to meet their needs.
TPS: WHAT DOES THIS MEAN FROM A PRODUCT OFFERING PERSPECTIVE?
DR: There is a significant amount of commonality across the vendor base. I think the important thing is what we can bring to the vendor base that participates in this combined entity. Directionally, both Bill’s organization and my organization are on a path to bring value to those supporting vendors. So, it will be less rather than more as we move forward because we recognize the need that the vendor base has in the marketplace and we will drive ourselves toward supporting premier, preferred vendors.
BB: One of the interesting things as we explored this merger is that we found both entities were on that path – admittedly, at the beginning of the path – toward understanding the fact that greater support among the members for certain vendors is obviously in the best interests of both of us. So it was very nice to see that philosophy was already ingrained in both organizations and we will continue to develop that. It’s a very necessary part of the evolution.
TPS: WILL THE PRIVATE BRANDING OF PRODUCTS CONTINUE?
DR: I think you’ll see us take some time to figure out what the marketplace demands and needs are. Both of us support private branding today. I think there’s a lot that’s left to be desired from the private-brand programs that we have. But we’ll examine where there’s value in the marketplace for them, and if in fact there is, then we’ll do it.
If you’re asking if we’re going to maintain two brands, the answer is we believe we will continue to market under two brands. There’s just too much equity in those brands. There’s a lot of value in both names out there, and we’ll continue to use them.
TPS: WHAT ARE THE GROWTH GOALS FOR MEMBERSHIP?
BB: I’m not sure if goals is the right word. The philosophy here is we need to cover North America. It’s twofold. Obviously, we want to make sure that we have the coverage that we need demographically. Secondly, when and where we have the opportunity to add a quality independent aftermarket distributor, irrespective of where they may be today, we absolutely will evaluate those in a timely and thorough basis. So it’s not a matter of we need to go from X to Y members. It’s a matter of within the overall goal of providing the parts and service coverage in North America, where would some of these people help us achieve that goal.
TPS: ANY SALES VOLUME GOALS?
DR: Our job as an organization is to help our members grow their businesses. So it’s that continued, sustainable growth that we’re looking for. If we can drive it through product diversification, program diversification and the services that we provide, we will to enhance the growth capabilities of our members.
TPS: ANY IDEA ON WHO’S DOING WHAT OR WHERE YOU WILL BE LOCATED? OR IS IT TOO EARLY TO TELL?
BB: Last part first. It’s way too early for that. Certainly, internally we have an org chart. But even before that, we’re trying to determine what it is we need to do as an organization to affect what we’re trying to do in the marketplace. So sure, we’ve got preliminary goals and we’re discussing that with the people who we answer to, the combined board. But the rest of it is probably premature at this point.
TPS: WHAT HAS THE FEEDBACK BEEN FROM MEMBERS AND FROM THE INDUSTRY IN GENERAL?
BB: Overwhelmingly positive. We’re not going to tell you it’s unanimous because there’s not many things in life that are unanimous. But I will tell you, it’s been overwhelmingly positive. It’s almost gratifying to a degree because as we’ve sat here [at the Aftermarket Distribution Summit] through meetings with our vendor partners, they have been proactive in saying they have been speaking to our members and people in general and it’s been very, very positive.
DR: I think if I took the three legs of the stool in the distribution channel – the vendors, the members and the installers – I would tell you that I’ve been pleasantly surprised by the vendor reaction. As Bill said, we’ve met with half a dozen of them over the past couple of days and it’s been very, very positive.
On the member side, Bill’s right. I couldn’t say unanimous, but I will tell you in our case the vote [of members] was unbelievably, overwhelmingly positive. We’ve also had positive feedback from the end-user community and they’re excited about the expanded services we’ll be able to provide to them.n
