Joseph L. Mejaly

Joseph entered the industry upon finishing college in the early 1980s at a time when interest rates were increasing and the unemployment was high. “I was not in a position to pick a specific industry,” he says. “But the growth potential of the commercial vehicle sector was promising and over my career I got into the aftermarket segment. I began to like it because it was exciting and challenging; and in the aftermarket business, personal relationships still matter. I like the fact that we have to be more nimble and quick, and I like the fact that our products make a difference in the industry. To a certain extent, we are breaking the mould.”

Since joining Meritor, Joseph’s career has been centred predominantly around sales and marketing, with a particular interest in the aftermarket. In 2005, he became president of the aftermarket unit, before acquiring the trailer business in 2008. “I’ve been with Meritor for 27 years, so I am almost an old timer,” he jokes. “When Meritor decided to sell off to its automotive sector, the company created three distinct business units – a truck unit, an industrial unit, and one unit dealing with aftermarket and trailers. And that’s what I am responsible for today.

“27 years ago, most companies thought of the aftermarket almost as an afterthought. But over the years, various companies have decided to transform into a professional aftermarket supply business. In fact, the aftermarket has become a significant component of any business’s profitability. Today, it has become mainstream for many companies in terms of revenue.”

Headquartered in Troy, Michigan, Meritor specialises in drivetrain mobility and braking equipment for the transport industry and the related aftermarket. Today, the company is home to 11,200 employees across 19 countries.

According to Joseph, Meritor’s aftermarket business pursues a very entrepreneurial model. “It’s fairly self-contained from the parent corporation, and it’s very consumer-driven,” he says. “Our product philosophy is servicing the entire lifecycle of a vehicle. Therefore, we have to develop a product that services a person that has a brand new combination and a person that has a 15-year-old vehicle.

“As a result, we use a multitude of brands to suit the entire transport market. We don’t only package and sell parts that fit Meritor production products, we sell products that address an entire product category. We are also trying to generate the lowest possible transaction costs for our customers, including high fill rates, short lead times, and valuable customer service. In the US, we already manage our customers’ entire inventories, offering a seamless transition to inventory management and supply chain solution,” Joseph states.

Meritor was also able to pull through the recent Global Financial Crisis relatively unscathed. “At Meritor, we are very proud of the way we managed the GFC. We didn’t file for any kind of bankruptcy, and we didn’t ask for money, we did it on our own, and we survived,” says Joseph. “But we had to take some hard steps. Every employee took a pay cut, and we all saw merits and bonuses go away for the year. We had to watch our cash flow. In fact, a positive cash flow became almost as important as profitability. We are still watching it regularly, almost daily. Looking back, I think the crisis has galvanized the people, and the team spirit has improved notably.”

He continues, “If a company invests in the aftermarket division at the right time – enabling it to grow organically – the down cycle will be tempered because you always have one revenue stream going for you. If you’ve made the right investment, you might not actually shrink, you might even grow in times of crisis. Our manufacturing business, for example, continued to grow even through 2009. So the aftermarket is a buffer that can help companies like us to get through a recession. The entire company can take some pride in that. The board sensed that an investment in the aftermarket division would pay off, and it did.”

For Joseph, keeping in touch with what is happening at the various Meritor facilities around the world is paramount, as is developing relationships with employees. “We have regular communication meetings all around the world,” he says. “I try to explore all new markets we approach on my own, because the place to start is the street. When we first commenced business in China, I went to the auto malls and walked around. You have to see how your product ends up before it’s sold. Who’s selling it, how is it being presented? There is no better way to get to know a market than spending two days just walking around and talking to people. If you don’t understand the consumer, you can’t be in this business.”

Joseph also recently took the opportunity to visit Australia for the opening of a state-of-the-art distribution centre in Derrimut, Melbourne. The new flagship Australian facility is designed to combine distribution, packaging and remanufacturing under the one roof.

“The Australian market is very brand loyal, and we take this fact seriously because we think we offer a good brand,” he says. “That doesn’t mean there are no price sensitive buyers along the way. But in general, I think that Australia is very brand loyal, and we won’t disappoint their expectations. We know that we cannot compromise on quality, so we have made investments to make sure that all products entering our portfolio are of high quality. We have an in-house aftermarket engineering centre in Bangalore, so you can be confident that a Meritor product is something you can rely on. We need to keep diversifying our product range to allow our customers to service a vehicle throughout its entire life cycle.”

Looking forward, Meritor has some big plans for the future. “We have terrific organic growth plans, based on three revenue pillars,” says Joseph. “One is the international distribution business. The second one is remanufacturing – we’ve tripled the size of that business in three years and we still only think we’re scratching the surface. And the third pillar is our 3PL business. For us, it subsumes everything we’ve built and it puts us in a playing field where we think we have a right to play – distributing, packaging and servicing the commercial vehicle industry’s products. We box over a million cartons a month in our Florence facility in Kentucky. We remanufacture 7 million shoes a year, we recycle tonnes of steel through that process, and we’re still only playing in two markets, North America and Europe. We’re still young in the Asia Pacific region, but we have a lot of motivation.

“I’m a very competitive character so growth, global expansion and competition motivate me every day.”

 

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