Small Business Stories -Webasto

Ivy Hartman: Welcome to SBTV.com's coverage of the 2008 SEMA Show here in Las Vegas, I'm Ivy Hartman and with me is Michael Lee, the Director of Marketing and GM for Light Duty of North America for Webasto. Michael welcome to SBTV.com. Michael Lee: Ivy thank you. It's a pleasure to be here. Ivy Hartman: Well, Webasto is 108-year-old company; tell us a little bit more about the history of the company and how it has grown to be what it is today? Michael Lee: Great! Webasto is a 108-years-old; it was founded by Wilhelm Baier in Stockdorf, Germany which is just south side of Munich, 108 years ago. The first product was wire coat hangers and they evolved into other metal forming kind of things for the first 30 years of the company. And they continued to evolve. They were approached by a bus touring company in Switzerland to develop an open-air system so that the touring company's customers could see the Alps, as they went through the Alps. And that evolved into the world's first automotive sunroof application. Shortly thereafter Daimler approached Webasto and said, hey! This is a neat product. Can you do this for one of our cars? So there automotive sunroofs were born in the 1930s. Concurrently with that, they also developed a technology called preheating, which was applied to vehicles under similar time. So Webasto's core business for the last 70 plus years has been preheating solutions in the automotive and commercial vehicles space, as well as, automotive sunroofs. We're the world leader in both segments for preheating, as well as sunroofs, in both OE applications as well as aftermarket applications. Ivy Hartman: Well, let's talk about the application of the heating and cooling system for consumers and then also for commercial, as you mentioned. Michael Lee: Sure. Preheating is a specialized form of a heating solution for no-idling solutions, okay? One of the problems that exist for not only a business solution but also as a regulatory concern is the idling of engines and typically here in North America we think of diesel engines, but it's also applicable to gasoline engines. Many municipalities have of anti-idling regulations that indicate that you can only idle a vehicle for so long, usually it's 5 to 10 minutes. However, people like to get into a vehicle that's one. So these sorts of solutions allow an engine, allow the heater to heat the cabin of the vehicle without the engine running. Okay, so that would be a very good passenger application. In the commercial vehicle segment it's a little bit different, a lot of commercial vehicle drivers especially over the road, spend a lot of time in their truck. And there are regulations of how long then you can drive, so they need to park overnight. They need a heating solution that can keep them warm at night or a cooling solution that can keep them cool at night, all while not idling their engine. Our technology allows for the heating and cooling of a cabin, of a commercial vehicle that uses one-tenth the fuel of idling the vehicle's engine. And that one-tenth fuel usage actually makes it a very positive investment for a commercial vehicle owner and the payback period for something like that is in the 3 to 5 month frame. So, it's a very good business's decision and it's also very good for the environment. Ivy Hartman: Okay, since we're talking about business decisions and the environment, those are pretty big issues right now at SEMA 2008. I'm going to jump right into this question. Michael Lee: Sure. Ivy Hartman: How has the current economy affected business for Webasto? Michael Lee: I think the current economy is a challenge for all of us and Webasto is no exception. And here's one very specific example, there was a recent suggestion that 1 in 5 new car dealers are going to go out of business in the next 2 years, okay? A lot of the people here at SEMA do business with new car dealers, when their customers start to go out of business, that very negatively impacts their revenue stream. My customers are those customers, the customers that do business with new car dealers. So, it's a very direct, potentially negative impact to us. There's a recent example of one large dealer that went out of business, 14 stores over 5 states, and I know that, that one new car dealer alone was about 0.5% of my business here in this country, from one dealer. And so that's just an example of the impact that the economy could have over the short term. Ivy Hartman: So how does a company like Webasto, where 7000 employees in an international presence corporate small business? Michael Lee: That's a really good question. A lot of our customers, despite the fact that we're a large company, we're a small company at heart, like family-owned, private company, grew a company from making wire coat hangers into a national company. So, we understand how to grow small businesses and the challenges that are faced by small businesses. So, we are working very closely with our customers to help them identify issues that they may have within their own company, help them work through solutions and be a partner with our small businesses. And to help together to work through a difficult economic situation that we'll face. Ivy Hartman: You obviously have a big department for innovation, a big call for innovation in the industry, do you do that internally or how do you tap into the innovation in the automotive industry that Webasto wants to offer? Michael Lee: Webasto has been known for many, many years for innovation and technology advancement. We actually look at innovation in a couple of different ways. One, we very actively develop innovation and technology internally and we do that by actively seeking people from the outside to bring expertise into our company that we really need to develop this technology, that's one way. The next way is that we actively seek companies that we can partner with whether it's some sort of business alliance, a form of JV or through acquisition, very specific technologies and R&D applications that we can pull into Webasto to improve our technology footprint. Ivy Hartman: One last question for you, what's your wisest goal here at the SEMA 2008 Show and what do you think we'll see different about this year's show than previous shows? Michael Lee: This is a pretty good segway from the technology question. Here in the aftermarket, for automotive aftermarket, we are continuing to look at advancement of technology. One of the benefits of Webasto being a large company is that we have lots of products and lots of technologies that we can draw from and you're seeing that out right here in the Webasto SEMA booth. We have a product that we're investigating for a large panoromic roof, that's based off of an original equipment application. Okay, so we're leveraging the technology and the expertise that we have within the company. We're also partnering with a company called Pittsburgh Glass Works which used to be part of PPG, which is a new technology for glass that we're showing. We're also trying to get some good feed back on. We're continuing to advance technology and using SEMA as a showcase for that. Our customers are striving for new ways to generate revenue for their business. And one way is through new products and new things that they can offer to their customers and we're here to get that input from them, so we can apply that to the next generation of aftermarket sunroof. Ivy Hartman: I said that was my last question but what do you think the mindset is of the attendees and people here at this year's SEMA versus previous year's? Michael Lee: I've been to coming to SEMA for years and it's always been just the most fascinating place. Las Vegas is the best place for SEMA. SEMA is really built upon performance, as it started out with performance products and it has really grown into a lot of appearance related items. The issues in a difficult economic time is the that those tend to be discretionary spends for a lot of consumers and so that's going to be a challenge for a lot of the SEMA people. So, what I believe is we're going to see a lot more grappling with business issues here and it's going to be a little but less about one-upmanship, which is one of the fantastic parts of SEMA, who can do the best thing at the show, but it's also going to be much more about building new business relationships, understand how we can come together as groups of companies to better serve our customers and to improve our profitability and all at the same time. So, I really think you're going to see business issues taking a big key focus here at SEMA. Ivy Hartman: Michael Lee with Webasto thanks for being our guest here. Michael Lee: Thanks Ivy, I appreciate it. Ivy Hartman: Absolutely! Michael Lee: I had a great time. Ivy Hartman: It was fun, wasn't it? And keep up right here as we continue our coverage of SEMA 2008 on SBTV.com, where small business is our only business.