Finding Common Ground

Robert Hattem is a rarity among senior automotive aftermarket executives.

While diverse professional experience is not unheard of in the boardrooms of this industry, most of the seats are filled by those who have grown up with this industry and can count their involvement in terms of generations rather than years.

And even those recruited from outside the automotive aftermarket come from a tight bundle of industries accepted as having significant common factors. (The grocery and hardware sectors have proven to be fertile ground in the past.)

Currently the president and CEO of UAP Inc., which operates the NAPA business in Canada, Hattem has a background that is significantly more diverse than most, and makes him particularly well suited to the current challenges of the Automotive Industries Association of Canada as he prepares to take on the role of its chair.

Once a junior hockey player, when it came time to seek a more conventional career, he was thrilled to join a sporting goods company, leading to a seven-year tenure during which he rose to become director of development. From there he went on to spend another seven years as vice-president at a hardware industry buying group, and from there to 10 years in the pharmaceutical industry, and then a five-year stint as president of an office supply business.

He joined UAP as Executive Vice President of its Heavy Vehicle Parts Division 11 years ago and only a short two years later, in 2004, was tapped to take on his present role as UAP’s president by Larry Samuelson, who was moving back to the U.S. for a role with UAP’s parent company, Genuine Parts Co.

“ Several people have lived in this business for 40 years, so it is a pretty stable environment. The fact that you come from a different industry brings you a perspective of business that is broader. You can bring certain elements from the other industries into play when you are producing a strategy. That’s what I enjoy doing, and it is what I think I [have] brought to this organization.”

And that diverse experience comes at a time when the AIA is itself becoming more diverse, with such recent developments as a recently added management contract with the Heavy Duty Distributors Council of Canada, and the even more recent announcement that it will assume the administration of the Canadian Collision Industry Forum over the next year.

Hattem sees great promise in these developments, and plans on working to ensure all groups see the benefits of finding common ground on industry issues.

“I think for it to work, people with the HDDC and the CCIF have to be willing to work together. You can’t force people to believe in these philosophies. It’s not a force-feed type of approach. It is a question of working together where we can. We have a strong association and a strong governance approach. We are building a very strong legacy of chairmen who believe in this strategy.

“The important part is that the strategy is well defined and you don’t get a change in direction with every new chair.”

At the top of his list as chair is the creation of a new committee within the AIA to focus on human resources issues. It is an ongoing issue that has recently come to the forefront of the national scene, when the need for more skilled tradespeople was highlighted in the most recent federal budget.

It has been recognized as a major challenge in the service bays and jobber stores across Canada, as well as within the collision industry and the heavy-duty industry, where a recent Canadian Trucking Alliance-commissioned report by the Conference Board of Canada predicted dire consequences –a shortage of 25,000 to 33,000 for-hire truck drivers by 2020, disrupting not only the trucking industry, but the Canadian economy and ultimately affecting the well-being of consumers as well–if a big increase in driver supply didn’t occur.

“One of the biggest shortcomings in our industry moving forward [is a lack of] technicians in our industry, people working in the jobber stores. And how, when we deal with governments, to align ourselves for the future, and that ties ourselves into the consumer and what the government is trying to do right now,” he says, referring to the federal skilled trades announcement. “We have to get some of our top human resource executives working together, collectively as an industry, to try to address these issues.”

As one of the biggest issues going forward, it is important for the AIA to work toward solutions in this area in a way it has not been.

But it is not the only challenge the new chair faces going in. The ongoing effort to institute regular vehicle inspections across the country is equally pressing today. While the topic is certainly not a new one, it has taken on a new urgency in recent years. In the modern landscape of extended service intervals and drive through maintenance programs that could result in a vehicle not seeing a full service bay for a comprehensive inspection for years on end, or when something goes wrong. Hattem sees this as a prime example of where the AIA’s focus on government relations can be brought to bear.

“When you deal with the government, it is important that it is a win-win-win situation. You have to focus on consumers’ needs and making sure that any strategy that the AIA and the industry develop is going to be beneficial to the consumer, the government, and the industry”

It’s another example of common ground, he notes.

“You’re not trying to make the consumer pay more to help the industry. You’re there to try to find solutions for the consumer. Underperformed maintenance is a big issue. Is that just for our industry? No. It’s for the consumer. We’re talking about consumers who are more and more indebted. If they can have a vehicle, one of the largest investments they make, last a lot longer, they free up capital to do other things. They pay off their debt, their car will last longer, and financially it will be beneficial to the consumer.”

He admits that some initiatives on this front can be traced back decades, but he sees greater promise in the new automotive service and economic landscape.

“It’s a long-term process. And there is a benefit to the consumer. There is a benefit to the environment. All in all, you have to develop a case and you have to persevere with government.

“I think we are starting to build a bigger case. A lot of work has been done through a number of studies and presentations, and we have to continue to do that.

“And as we continue to build a case for this, we are going to make some headway with governments. It is going to be a slow process, but if you get one government and then a second, you are going to see some progress.” He points out that New Brunswick and PEI have mandatory annual inspections and Nova Scotia is on a biennial basis, which can be counted as progress.

“It does serve the industry too, there is no question, and it serves the economy. These people are going to pay taxes and businesses will employ more people, and so there are a lot of benefits from that perspective.

“We are going to focus a lot on this issue. It is a key element.”

Third in what will form his triad of initiatives over the next year is an increased push for better research and data, more detail, and better interpretation of trends.

“One of the things that will happen in this industry is change. Vehicles are being made better and technologies are more advanced. We are going to need to focus on that and get more market information.

“We have some surveys right now, but I think we have a lot more work to do in getting a better understanding of the changes that are going to occur in this market and how it is going to affect our businesses, and what are the things the industry has to do in order to better position itself in relation to the overall automotive market.

“That’s going to be critical. What studies and surveys do we have to do in order to guide the people in our industry, so that they are focused on what they need to do? Every change presents an opportunity, but we have to take advantage of those opportunities if we are going to be successful.”

Drawing on his past experience, he sees room for the entire industry to improve in the creation and use of detailed research.

“I have come from different industries, and the level of sophistication of the data and the accuracy of the information is much more sophisticated in other industries.”

He recognizes the value of information from firms such as DesRosiers Automotive Research, Frost & Sullivan, Polk, and J.D. Power and Associates, but says more detail is needed.

“We have to go much more in-depth in how we interpret the data as we go forward. One of the things we are talking about is what data we require to better manage this industry.”

One of the barriers to greater detail has always been money. This industry has seldom made the kind of investments in research to provide the highly detailed results that Hattem is talking about.

He is convinced that if the benefits to both larger and smaller players are made clear, this challenge can be met.

“Once you have that value, people will buy into it.”

Communicating these initiatives and getting more aftermarket professionals to buy into the value of the AIA is certainly a key component of his plans for the next year.

“We have to get people more involved in the association. We have to get the message out about the government relations, the market research, the human resources issue, and get people from the industry to work on these projects.

“I’m going to focus on communicating and getting more buy-in from the stakeholders in our industry. I’ll be going across the country, talking to other stakeholders in the industry and working to have them buy into what the AIA is today and what it could bring to their business, at all levels of the industry.

“As an industry you have to work together hand in hand, dealing with governments and developing strategies that will be beneficial to the industry. You have to take your ‘company’ hat off and really focus on those opportunities. To grow the industry, we have to be committed to that together.”