The transportation business is a matter of calculated passion for Roger S. Penske. Well beyond needing the money, it is the competition that drives the auto racer turn& entrepreneur. Racing analogies litter conversation about his business empire like tires at a pit stop, He paused, briefly, from his efforts at Detroit Diesel Corp. to talk with Ward's Auto World.
Q - What In particular attracted you to Detroit Diesel?
A - It was a business opportunity. I typically have taken businesses, which were not highly fine-tuned, and been able to add our expertise in team-management style to bring them to a solid and profitable market position.
I was contacted by an investment banker who had the job of either selling off or breaking up Detroit Diesel. I guess if I hadn't gotten the call, I wouldn't have been knocking on the door. But when I did get the call, I realized here was a business I had been involved with for 15 years as a distributor. I knew the product, I knew the problem, I knew the people.
So, with that in hand, I took a look at what the structure of a deal could be. Typically, I have always wanted to have good partners. I've learned that two people can pull on the rope harder than one. When this opportunity came about and I was able to look at potentially having GM (General Motors Corp.) as a partner. Q - What's your assessment after about a year?
A - This is the greatest. We've got a 3-million-sq.-ft. (278,700-sq.-m) plant and everybody's pulling in the same direction . I look at the numbers coming in every day on our new Series 60 engine and we're on a market share climb that's hard to believe. And that creates different problems.
We're making some reat progress. Everybody's having fun. We're very positive. Not that it has been easy.
Q - Does It signal a change in direction for Penske Corp.?
A - I don't think I'm concerned about what types of businesses, whether it's manufacturing or not. I think that expense controls, sales capability, technology are important. There are good people out there and, I think, the better you are as a communicator, the more apt you are to attract those kind of people.
Q - Isn't manufacturing new for your organization?
A - It's certainly a different atmosphere, but I've been in the manufacturing business. We manufactured stainlesssteel aluminum tank trailers in a company we hadat one time. We manufactured large turbine generator sets.
We manufacture race cars. Somebody said to me 'what the hell is a race car compared to building a diesel engine?' Look, I know where the product goes, I know what's required from the duty cycle and to meet the customer requirements.
When you look at American industry during the last 10 years, if you're not capable of changing your course, you're probably going to be out of business.
Q - Does that mean other Penske manufacturing efforts?
A - I'll look at anything that would be in a transportation-related business. Components or things like that where I understand the customer base. Where am I going to go with the product? Then I back up to find out what it's going to take to provide that product.
I think if we can prove we can run this type of business, we can look at other things. Penske Transportation, the truck leasing business, these are all interrelated as far as transportation.
Q - Could that Include assembling niche cars?
Obviously, there's an opportunity for niche cars, but seeing the capability of both the foreign and domestic manufacturers, I don't think you'll see me in that business.
Q - At what point does your organization get so large you can't manage it In your traditional hands-on manner?
A - What you have to do is develop the right kind of people and the right kind of controls. It's no different than the CEO of a large corporation managing his business. You learn how to do that.
I want to understand what's going on in the organization. I'll be walking through the plants, or looking at the suspension setup or looking at dyno sheets for my whole life. The day I stay out of the factories, I should get out of the business.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment