Industry voice: Detlef Borghardt, SAF-Holland
- From the June 2011 issue.
SAF-Holland’s legacy started in 1881, when Paul Zill, a blacksmith from Keilberg, Germany, developed a two-way plough for the agricultural industry. Time passed, and Zill’s family operation evolved to became Otto Sauer Achsen Fabrik (SAF). Yet no one would have anticipated that the company would transform into what it is today – a multi-national corporation supplying transport equipment around the world, lead by new CEO Detlef Borghardt (48).
Since the Holland Group merged with SAF in 2006, SAF-Holland has continued to build on its stance as a leading force in the international transport equipment industry. As a global supplier and manufacturer of fifth wheels, axles, suspensions, landing gear and associated products for the truck and trailer industry; SAF-Holland has achieved a leading market position in Europe and the world. Headquartered in Germany, its products are sold and serviced by over 4600 distributor and OEM locations internationally.
Current CEO of SAF-Holland Group GmbH, Rudi Ludwig, has chosen to step down from his position effective 30 June, 2011, paving the way for aspiring engineer Detlef Borghardt to follow as his successor.
Q: Mr Borghardt, please tell us about your career path.
A: My career in the automotive industry began as a car mechanic. After studying vehicle design in Hamburg, I started off at Alusuisse-Lonza, working in the product development and sales division before becoming a member of the management team. In 2000, I came to SAF-Holland and ended up working in the global sales, marketing and customer service department. I then joined the management board in 2007 and was made deputy CEO at the start of 2011. When I first joined the company, we had 400 employees, now there are about 2800 – so a lot has changed in the past few years.
Q: Do you think that starting out as a mechanic has helped you in pursuing a management career?
A: Yes, very much so. To be successful, you have to speak the same language as the client. It doesn’t matter whether it’s the aftermarket or OEM sector – if you have a technical background and know how to change the brake pads and how much grease a particular product requires, you meet the client at eye-level. Therefore, the people employed at SAF-Holland must have a technical background. We don’t hire people just based on employment history, they need to have technical expertise, too.
Q: Are you still in touch with the base level?
A: Yes, it’s part of my daily routine. I have to keep up-to-date and be in touch with all divisions to be able to talk to the customers about their problems and their ideas, and address issues hand in hand with our engineering department.
Q: Did the industry’s character change since you started your career?
A: I think the commercial transport industry is more globalised today. As opposed to the truck industry, which has begun operating on an international level long ago, the trailer sector has always been a very regional one and is still developing on a global scale. Companies have started to cross borders and think internationally. It’s not uncommon to travel to China to establish a business partnership or source material in India or Russia. In addition, the people have become more flexible - and I believe that they love working for a corporation that is able to overcome national boundaries.
Q: Did the ongoing globalisation change SAF-Holland’s strategic goals?
A: At SAF-Holland, we still focus on the European and North American market, as we generate about 45 percent of our sales revenue in the US, 50 percent in Europe, and less than five percent in Australia, which is a small marketplace compared to Europe and the US.
Since we have established a strong position in these mature markets, we keep monitoring new, promising marketplaces. To benefit the company’s total growth, we have to be present in emerging markets like Asia, South America, Africa, the Middle East and India.
Q: Many international companies edge into the Brazilian and Indian market at the moment. Do you feel any pressure?
A: No, we are not in a tight sport. We try to establish a premium product, whilst the competition, especially the local one, is focused on competitive pricing. That’s not the SAF-Holland philosophy; we want to offer a new, value-adding product range. Even though some global players pursue the same goal, we feel confident.
We know that we cannot compete if we rely on pricing alone; and the European market has taught us that quality is a strategic advantage. At the end of the day, you simply have to offer the best product to be successful.
One of the key elements of our global strategy is to work directly with local fleet operators to draw on their experience to develop a product that will suit a market’s specific needs. Local fleets are an important element of our international customer base and we work hard to maintain a strong relationship with them.
Q: Do you pursue the same strategy on the Australian continent?
A: Australia is a very demanding market, and quite unique compared to Europe and North America. In Australia, customer service is the key to success. But the main challenge is the country’s enormous size. To provide premium service, we have to make spare parts available all around the country. Stocking and servicing the entire range of components for trucks and trailers is a real challenge, though. And as the demand is ever increasing, the expectations are as well. To keep customers happy, we need to deliver service within 24 hours, wherever the client needs help.
Due to the size of the country, the harsh environment and the rough road network, we need to make a huge investment to capture a relatively small market. Plus, when you have the best product, you also need to have the best personnel. Finding the right people to represent the company is crucial.
Q: How about the local mentality?
A: In Australia, trust is an important aspect of every business relationship. In Russia, for instance, you will not finish a deal if you don’t know a client in person, and in Australia, personal relationships are equally important. If you fail at satisfying the customer, you will be in trouble.
Q: You will become SAF-Holland’s new CEO of as of 1 July. How will you tackle the new challenge?
A: If you envision what you want to achieve and pursue a goal, you can achieve anything. About six months ago, we developed a future strategy for the next five years. Now the job is to implement the strategy and achieve results. You won’t recognise major changes in the near future, though, because it will take some time to implement a whole new strategy. In addition, our customer base is rather conservative; so we will not make the mistake to adjust our course hastily. But you may see a change regarding the style how the company is managed, because I love fast decisions and consider speed very important on a management level. Therefore, our management team is comprised of both experienced and young, aspiring people who know each other very well and are able to find a solution without hesitance.
Q: What does the five-year plan include?
A: The content of our future strategy is confidential – but I can say that there will be some interesting novelties. After all, I am an engineer, too, and I encourage technological progress. Just wait and see.
Q: How would you describe your personal work philosophy?
A: You have to be open-minded, honest and avoid taking detours. Therefore I always encourage people to be straightforward. There is no need for hesitation or strategic considerations. Just tell the truth. I believe that honesty is very important in today’s business world, and it is one of my key principles. Don’t try to cheat people.
I also like to act fast – but at the same time, I know that you do need think twice about each decision, based on experience and the advice of the people surrounding you. After all, they may be right.
Q: Will you keep travelling a lot as CEO of a global corporation?
Indeed. I spend most of my time on a plane, and not in my actual office. I love to be where the customers are, where my people are, and I don’t like to make an important decision based on a simple telephone conference. Plus it’s great to meet people in person and experience a different culture first hand. I’ve been working in the commercial transport industry for 20 years, and after a while you get to know a lot of people and develop a solid global network.