Even the seasoned aftermarket veterans can’t remember a time when things were this economically troubled with a financial future so uncertain.
By the time you read this – with wild, daily swings on Wall Street, more expected failures among “bedrock” institutions and the culmination of a presidential election – things will have changed.
In what direction and how significant is anyone’s guess. When former Federal Reserve Chairman Alan Greenspan – considered not too long ago an infallible seer – admits that a financial forecasting success rate of 60 percent is considered doing “exceptionally well,” it is truly anyone’s guess.
Things are tough all over and for heavy-duty truck parts distributors and service providers, probably with very few exceptions, no one is performing up to expectations or projections. It isn’t a matter of not having looked close enough at the market and the greater financial influences at large; it’s a matter of no one saw this coming, at least to this degree.
But trucking is a cyclical industry and it was on the downswing before the rest of the economy caught up with it. Traditionally, trucking also leads in the upswing, but the general consensus is that’s at least three quarters away. The advantage of making a living in a cyclical industry is that going into survival mode is less a panic decision than a calculated, practiced business move.
This issue of Truck Parts & Service includes our annual profiles of Distributor of the Year finalists. Our editors have collected some insights and wisdom from some of the aftermarket’s more astute business owners. They have weathered downturns, though not necessarily of this magnitude, but perhaps you can take some solace or cues from their business acumen.
“I’m not sure that there’s anything that’s prepared anybody for the current economic downturn,” says Jerry Weis, president of Ott’s Friction. Weis and his managerial team aren’t conducting business with blinders on either. He attends most major industry meetings and listens to those reading the tea leaves. And he and his colleagues read a few of their own. He admits there is no crystal ball, but today’s challenges have prompted Ott’s Friction to take a more regular pulse on the market and their business.
“We really spend more time communicating, planning and looking forward,” he says. “We’re looking at the next 90 days and the next five years. The forward planning now has to be an integral part of your everyday vision, where in the past you did it once a month or once a quarter. Now it’s daily. Nightly. 24 hours a day.”
Camerota Truck Parts has laid a foundation of diverse product offerings and services to meet customer needs across a variety of markets. And they have done so better than the competition. It is a formula keeping Camerota Truck Parts in the black. While performance this year may not rival that of recent years, Camerota Truck Parts is taking advantage of the economic climate by exceeding at what they do best.
“As a company, we have grown in 47 of the last 48 years of our existence. And this year we will continue to grow. However, just so there’s no misunderstandings, our growth is coming from others,” says Frank Camerota, president of Camerota Truck Parts. “This market is not expanding, so if you are not best in class for a good part of what you do, you better decide how to get there.”
Ron Draheim, global marketing manager for Spicer Service Parts, aptly summarizes what helps keeps Camerota growing, despite a down market.
“Camerota’s business model thrives on servicing a diverse group of markets and products, which separates them from the competition,” says Draheim. “The entrepreneurial spirit and hands-on leadership style of the Camerota team positions their business as not only a great parts distributor, but also as a service provider, including operations for rebuilding, installation and reclamation.”
Getting through this economic cycle relatively intact will be a struggle for those not already prepared to weather it. Across all businesses, there is a tightening of belts and a sharpening of focus on business practices.
Like all previous cycles, this one also will result in an eventual upswing. When that happens, remember the lessons you learned, keep your belts tightened and a razor sharp focus on good business practices. This will put you in an even stronger position to weather the next inevitable downturn.