Focusing on performance: management buyout of Hayes Brake results in formation of HB Performance Systems; no brakes on growth

Diesel Progress North American Edition, Sept, 2005 by Mike Brezonick

"Specialty Products is a segment where there are technologies that we could develop ourselves, but it comes down to, 'Do we want to spend the money or the time it takes to do that?'" said Peter Nelson, vice president of both the Powersports and Specialty Products groups. "There are a series of things we're looking at where that's the question we have to answer.

"A good deal of our time lately has been focused on the utility vehicle market. It's an area we identified a couple of years ago as a segment we needed to develop product for--not just for a specific customer, but for the market.

"We have a number of products for that market and right now we're launching a product for a specific customer that will be introduced shortly."

Most of HB Performance Systems' products are built at the company's 155,000 sq.ft. manufacturing facility in Mequon (the company also sources components from two wholly owned subsidiaries in China). The headquarters facility is ISO 2001 certified and incorporates in-house prototyping, cellular manufacturing processes and complete testing capabilities. The company has invested significantly in upgrading and modernizing its manufacturing and testing infrastructure and is in the process of commissioning a new dynamometer-based test cell. "It's essentially ready to go," said Nelson. "We will be able to run all of the products we make on it and will be able to do all of our life cycle testing, high energy fade testing, all of the various types of brake testing we need to do."

It's those kinds of capabilities that McNally cited as hard for many companies to match. "If you compare us to some of the other providers in the market, our technical resources are very deep," he said. "Using the motorcycle business as an example, there are two other major brake providers, one in Italy and one in the Pacific Rim. They are pieces of very large companies, but once you peel the onion and look at the resources they have for that business, it's a much different picture.

"Looking at the big picture, it looks like they have more than 150 engineers and over $1 billion in business. But narrow it down to the products we produce, we have a very high level of technical resources in comparison.

"The second piece is we have people who are enthusiasts and that makes us a little different as compared to just the hired help. The people we have ride the product, whether it's a motorcycle or as a farmer on the weekends or they've operated a Cat 950 loader. Our people work on it all week and then they play and work with it on the weekends. And that makes a difference."

With the continuing focus on acquisitions and new product development across its businesses, the company's management is looking forward to the future.

"We're revitalized," said McNally. "We did a nice job organically, Now we shift into second gear and as we start acquiring businesses and integrating them, we have to keep our speed up. We have the financial capability to grow through acquisition and to make internal investments and part of that equation is product development. We will be introducing more new product in a three-year timeframe than were introduced in the 20 years previous. That shows you the execution and the focus."