Other Articles - October/November - 2017

A Conversation With Monte Ahuja

This past April, Monte Ahuja returned as the Chairman, CEO, and significant shareholder of Transtar. I had the opportunity to speak with him and find out what he has in mind for the future of the company – and the industry.

Dennis Madden: I’m really excited that you’re back. It’s been chaotic over the past few years.

Monte Ahuja: So I’m learning. Over the last couple of months, I’ve had lots of meetings with our employees, customers, and suppliers… many different people associated with Transtar. It seems like there’s a lot of anxiety and confusion in this industry, as if nobody knows where it is heading and what’s happening with our business.

So I think it’s time we look at some broader industry dynamics in order to really understand this industry and where it’s going. I keep telling people that, unless somebody really starts thinking of the industry and then tries to take some steps to secure our future, there’s no way to be certain of our future.

D. Let me ask you something Monte: What caused you to want to return to Transtar?

M: You know, when I made my second exit in 2010, I thought I was pretty much done with this industry. I was getting close to retirement and I thought that was the end of what’s been my whole life since my college graduation. I worked with Lempco Industries for three or four years and then started Transtar almost immediately after. So this industry has been my career almost my entire life.

D: That was 1972?

M: Yes, I started working at Lempco in 1972 and, going to evening classes, graduated with my MBA in 1975. I incorporated the Transtar business as Delta Automotive on April 1, 1975. People ask me, “why April 1?” My response is, nobody gave me a chance in the world to succeed. I was 29 with no money, still fairly new to this industry. I thought, “I’m going to either make a fool of myself or a fool of everybody who laughed at this move.” That’s why I chose that date. That’s when I really started the business, although my career in the transmission industry started in 1972.

In 2010 I moved on, mostly to focus on philanthropy and the investment business, both of which I enjoyed. I became more involved with golf and traveling with my wife and friends, which became a pretty important part of my life. And last but certainly not least, my four grandchildren became the focus and joy of my life. I was enjoying the semi-retired life, fully!!

But here’s what happened: Neil, my son-in-law, continued to work at Transtar after I left. In 2013 he also left the organization and I brought him into my financial investment business. However, he had developed a bug for the transmission industry, and in 2015 he talked me into going back into that business.

Although I was enjoying retirement, I still had a passion for the transmission industry, so I agreed. It made sense financially, I had the knowledge, and had maintained my contacts and close friends. But I insisted that I didn’t want to get back into to day-to-day work, which he understood. He didn’t really need me for that; he is very capable of doing it on his own.

We considered many options and decided to start looking at a potential acquisition to re-enter the industry. We ultimately decided to start fresh with a new company. We made the right contacts, did the right planning, and launched Transmaxx two years ago. It was a smaller enterprise: A neat, clean, and very professional operation. While we had early success, we knew it was going to be a long process to build a national distribution network.

As we were exploring our growth strategies, we learned of the opportunity to invest in Transtar and decided to pursue the prospect in partnership with a well-regarded financial institution. This move allowed me to return as Chairman & CEO. Neil Sethi and Tom DeMille also rejoined the company as President & COO and Vice President of Sales & Marketing, respectively.

We made the decision to merge Transmaxx into Transtar. This process was completed in early July.

D: So is the Transmaxx name going away, or will it continue to be a subsidiary of Transtar?

M: Transmaxx as a company is gone; it’s already been absorbed by Transtar. We’re holding the brand name just in case we decide to do something else with it. But it doesn’t exist as a company.

D: I visited Transmaxx about a year ago, maybe longer. I found some interesting aspects of how they did business. It seemed to be a new approach to using eCommerce to make the ordering process easier and more efficient. Are you planning to bring any of that from Transmaxx to Transtar?

M: Absolutely. When we started Transmaxx, our goal was to see what we could do differently to successfully address the needs of our customers. We were looking to bring some new ideas to the industry.

We spent time with many different transmission shops to see how they do business, and we learned that one of the biggest challenges our customers face is determining what parts they need, due to the proliferation and complexity of transmissions. We created a technology that streamlines the sales order process by automatically identifying the transmission the customer is working on and creating an automated online ordering solution.

The technology is called “Transend,” and it virtually eliminates the error in ordering parts. Using just the vehicle’s VIN, a technician can identify the transmission, the make and model, and the necessary parts to rebuild the transmission. The order can be immediately transmitted online and put into the distribution system of our company. We are thrilled with the system and have actually filed a patent for it.

Transend is built on an extensive database of transmission applications and associated parts which is very current and up-to-date. This system essentially eliminates the need to maintain and print a catalog.

Transend is available online so the transmission specialist can access with their PC, phone, or mobile tablet. Using this system, orders can be created, placed, and tracked online, improving the entire delivery process.

We’ve also assembled and incorporated technical information that’s out there into our system. So if a customer wants a one-stop solution, they can get all the parts information, transmission information, and even all the technical information that’s available for that transmission.

Technology like this takes a long time to fully integrate and requires a scale of volume to be affordable. We used it very effectively at Transmaxx, and we see the opportunity to benefit Transtar customers as well.

We’re committed to introducing and incorporating this technology at Transtar in order to make this business much more efficient and our ordering and shipping processes more accurate. We believe it’ll just about eliminate the possibility of shipping the wrong parts.

This is the best ordering technology in our industry, by far, but we have plans to make it even better, improving our overall customer experience.

D: Something Neil said is that, “If we were just selling parts, we’d be no different than anyone else.” Our customers are focused on fixing cars, and getting the customer back on the road quickly.

I thought that was really progressive thinking. If the customer can fix the car with right parts and quality service, he has time to develop his business for growth, which he barely has time for now!

M: For a transmission shop to succeed, they need to have good quality products, and they need the right parts. These days, because of the different transmission models and year breaks, it’s very easy to have the wrong parts.

You get a part from a supplier and then, when you’re ready to build the transmission, you discover it’s the wrong part. Now you have to send it back, reorder, get a credit, and all that time is lost.

So, our goal is to provide the customer with very high-quality product at competitive prices, on time, and without errors.

The only thing we haven’t been able to solve is something I was talking about earlier. We need to develop a large network of trained transmission technicians nationally, so shops can once again start rebuilding transmissions and not just become R&R shops. That’s where I see the greatest opportunity for the industry to grow.

D: So how would we accomplish that? Do you have any thoughts on training young people to get into this industry and revitalizing that aspect of it?

M: That’s one of the toughest missions: To get engaged in the educational process. I can’t do it alone. Transtar can’t do it alone. It’s going to need some cooperative effort from organizations like ATRA, to engage the support of local and state government to sponsor some technical education specializing in transmissions in the local community and trade schools. We all need to support an effort like that.

I’ve only been back for a short time, but I believe that it’s feasible to start connecting centers with local trade schools. There are all kinds of government programs available; we have to discover ways to take advantage of them. We need to start developing core training for technicians.

When you talk about the job market, not all high school kids want to go to college. They’re looking for ways to enter the workforce, but there aren’t many jobs that pay well. When it comes to a skilled trade, there aren’t a lot of options.

But with a year or two of training, that kid could start as a transmission rebuilder. It’s a phenomenal career, with a huge potential opportunity: figure 8,000 to 10,000 shops in the country, maybe one or two techs like that in each shop, you’re talking up to 20,000 potential jobs. It’s a terrific start for a career, and it’d be great for our industry.

D: A couple years ago, we did a focus group with kids from an automotive college, and they weren’t even aware that there was a career opportunity in transmission repair. They thought a transmission was like an alternator and you just replaced it.

But what I found really refreshing was that several of them said they wanted to be the guys that could fix what no one else could. They were up for the challenge. They were very excited to learn that there actually is a career in transmission repair, so part of this challenge is getting the word out, because there are some really sharp kids out there. They just don’t know that the opportunity is right in front of them.

M: That’s one of the reasons I wanted to reach out to ATRA. That could be its primary mission: To help us reinvigorate this industry by creating a cooperative group of companies like Transtar, and bringing a plan together. What you have to do is start maybe one or two places and succeed there, then expand throughout the country.

D: One of the things we’re working on right now is virtual training that we can offer colleges, where a student can learn rebuilding and the skills needed for transmission repair on a virtual basis. And I think it’s something we can accomplish, that can get people trained so they can be productive in a transmission shop.

M: That’s my mission. I have plenty of contacts in Cleveland and Ohio, and as soon as I get a little bit settled with Transtar, I’m going to pursue that and will be reaching out to you. If you can start a pilot program here in Cleveland, there are a lot of trade schools and community colleges here to carry the ball forward.

If we could show how quickly these graduates can be absorbed by the industry and begin a career, it will attract a large number of prospective students. They can count on a job almost anywhere, as almost every city has a need for that.

D: Not just an instant job, but a good-paying job, one you can support a family with.

M: That’s what I’m focused on. I was trying to think about it years ago when I left. Today it’s become even more of a challenge to find those people.

I hope to be getting back to the topic of education soon, and when I do, the first people I’ll be contacting is ATRA. I am hoping our interests align in that.

D: I think they do. It simply must be done. It’s not a matter of if, but when.

Okay, well I have kept you for 30 minutes; I can’t believe how quickly the time flew by. Is there anything else you wanted to say with regard to changes in Transtar, the future, and the things you think may happen in the next few years?

M: Regardless of what Transtar went through over the last few years, we are still a great company. We are continuing our legacy: For more than 40 years we have served our customers with excellence. We carry the most extensive product offering distributed through our nation-wide network – more than 70 branches with four distribution centers.

We have a very strong base and we’re just building a great, productive, efficient, and profitable company on that foundation. That’s what I’m focused on, and I’m very comfortable that I can do that sooner than later. It’s a great opportunity for us and the industry to see Transtar as a long-term, reliable supplier and partner in this business.

D: Terrific. Thanks, Monte. It’s always a pleasure chatting with you. I appreciate you spending the time talking to me.