When the black-and-yellow, pointy-tailed Marmon Wasp won the first Indy 500 race in 1911, it was thanks to innovation. Not a faster engine, or even the more aerodynamic shape of the car. The key was the rear-view mirror.
Ray Harroun was the first driver to race without the extra weight of a riding mechanic to watch for cars from behind.
That spirit of innovation exists to this day at the companies that make up The Marmon Group. I'd guess it's probably a big reason Berkshire Hathaway decided to buy the company in 2007, in what was at the time the largest acquisition Warren Buffet had made.
It's definitely evident at Marmon Highway Technologies.
I recently had a chance to go through the "road show" which has been making an appearance at major fleets and other events around the country for the past year to give visitors an introduction to the companies that make up MHT. You've probably heard of many of these companies - Fontaine Trailer, Fontaine Fifth Wheel, Webb Wheel, Triangle Suspension and others - but may not have been aware they were all under the same corporate umbrella.
But the Ideas in Motion road show demonstrates the results of the deep pockets of Bershire Hathaway and its commitment to R&D. The road show makes it evident that even through the recession, even as other expenses were cut to the bone, the research and development teams at MHT's member companies kept the new product pipeline up and running.
As I went through the displays and spoke with the executives and engineers and sales people manning the booths, there were two things that I heard over and over: innovation, and attention to the kind of details that make truckers' lives easier, their equipment safer, and their businesses more profitable. And it's not just marketing-speak.
It was obvious, as they talked about products ranging from something as seemingly simple as a mudflap hanger, to a new lighter-weight replacement spring for the Mack Camelback suspension, to the Fontaine Revolution line of platform trailers, to a composite fifth wheel under development, that these people embrace innovation not just for the sake of innovation, but for true value to the end user.Meet Kelly Dier
The font for this consistent focus on customers and innovation became obvious when I had a chance to sit down with MHT President Kelly Dier. When I told him what I'd observed, he laughed, and pointed out that after being president for 30 years, he would hope that his philosophy would be evident.
"The greatest sales opportunity in the world is a customer with a problem," he told me. "We've got to do the right thing every time, whether it costs $10,000 or $5 million."
When Dier (that's pronounced deer) took over what was then Fontaine back in 1982, the company was losing money. Fontaine founder John Fontaine had retired, and the new Marmon management put the then-33-year-old Dier in charge - no big corner office, no bonus, no company car, just an opportunity to figure out how to turn things around. And if he didn't? No golden parachute, nosirree - he'd be shown the door.
Kelly decided to divide the operation up into seven separate companies, each with its own top executive to lead it - and gave them the same ultimatum he had been given. Then he virtually eliminated the overall corporate office, taking it from 76 employees down to two: himself and his secretary. (Today, it's four, he said, but only because HIS bosses said he needed a chief financial officer and an accountant.) In a little over a year, the company was making money. By 1984, it was thriving.
In 2002, new Marmon management divided the holding company into sectors and created MHT from Fontaine and additional Marmon transportation-related companies, with Dier appointed president.Innovation in Motion
The company continues to focus on bringing product to the marketplace that will bring value to the end customer. That means innovation rather than producing commodity parts. For instance, Dier says recent efforts on cutting out weight, such as the Fontaine Revolution platform trailers and Webb Vortex brake drums, are playing well as fleets buy newer trucks where government-mandated emissions equipment is adding weight.
More innovation is reflected in the large investment in automation in its factories, which has allowed MHT to avoid offshoring its production. In fact, Dier believes he's on the leading edge of a trend. Manufacturing that has been outsourced to China and other countries with low labor rates will return to North America over the next 20 years, he predicts, driven by rising logistics costs - especially fuel - and the need for tighter supply chains.
One of the ways Dier accomplishes this is by fostering a corporate culture where people enjoy working. "I grew up in a working class home, and it was important to me that people were treated with respect and dignity," he says, whether they're top executives or factory workers.
Dier, who likes to make fun of his own short height and has been known to show up to meetings in shorts and a Hawaiian shirt, also emphasizes one more important factor that helps create a corporate culture - that work should be fun.