In June 2018, North America’s largest trailer manufacturing business, Wabash National, will experience a historic changing of the guard. After a well-structured six-month handover process, long-serving Chief Executive Officer, Richard ‘Dick’ Giromini – the very architect of the brand as we know it today – will step aside to make way for home-grown talent and current President and Chief Operating Officer (COO), Brent Yeagy.
Having joined Wabash National in 2002 – first serving as COO before being promoted to CEO in 2007 – Giromini will be best remembered for transforming the Lafayette, Indiana-based organisation from a traditional trailer building specialist into a highly diversified manufacturing operation at the height of the 2008-9 recession.
Under his watch, the 33-year-old business managed to expand beyond the boundaries of the transport equipment industry to also include pharmaceutical equipment, silos, aerodynamic solutions, truck bodies, and other non-trailer products. By doing so, Giromini managed to reduce the brand’s dependency on highly cyclical dry van trailer sales from around 85 to 60 per cent in less than a decade, albeit “without decreasing the presence in that space, just by growing other, often related areas of the business around it,” as he puts it. Looking back, analysts agree that Giromini’s determination to take action during the crisis has not only been crucial to the company’s survival and ongoing growth, but also pre-empted a more broad-based diversification trend currently sweeping through the trailer building industry.
Yeagy – who served in the United States Navy from 1991 to 1994 – joined Wabash National in 2003 and has since held a range of positions with increasing responsibility, including Vice President of Manufacturing, Vice President and General Manager of Commercial Trailer Products (CTP), and SVP/Group President of CTP. Having worked alongside Giromini as COO since 2016, he will officially take on the role of CEO on 2 June 2018.
In Part One of an exclusive double interview with Global Trailer Magazine, the two open up on the emotional toll behind the landmark transition and give a deeply personal account of the time between announcing the move and the now imminent end of the Giromini era.
Q: Dick, you took on the role of Chief Executive in January 2007, right at the start of a gruelling, 17-month bear market in the US that coincided with the worst global recession since the 1930s. Since then, you have seen three federal administrations come and go, and with them three distinctly different takes on heavy vehicle policy. You must be looking forward to a break by now…
DG: Let me begin with saying that it’s been an absolute privilege and a great honour to have served as the CEO of Wabash National over the past 11-and-a-half years. It’s one of those opportunities you just never, ever expect to come along – but it’s been a truly wonderful experience. To answer the question: Yes, I am certainly looking forward to taking on a more relaxed approach to life now and having the flexibility to do so. You see, I’m a very driven person, a very ‘type A’ personality, so it was always work first for me; putting every bit of energy and effort into it. That usually meant long days and little downtime.
Q: How have you experienced the past six months since the announcement was made public? Have you managed to gradually gear down, or will it be full steam ahead until the very last day?
DG: We made the announcement right before Christmas, so it’s only been a short while since then. Professionally, it’s mostly been ‘business as usual’, the typical early year activities, if you will. We’re trying to focus on the job until it’s time to go.
Q: And emotionally? What was it like knowing that you were doing many of those activities for the last time?
DG: That’s a great question. When we made the announcement back in December 2017, it really was the first test; and it went through very well, and I felt very good about it. That tells me that I’m certainly ready; I’m ready to make that transition. I’ve been considering the step for the last three years or so; and what I’ve learned is you just know when you’re ready. That’s why it was a calming experience when we made the announcement. I say that now – we’ll see how those emotions take over when June comes around. Most importantly, I’m just excited for Brent. I’m excited for the future of Wabash National. Brent’s ready. Brent’s going to do a great job, and take us to higher and higher heights.
Q: Why exactly is that? Which qualities made Brent the right choice?
DG: Brent is an extremely focused individual and very deliberate, and those qualities – having worked with him for the past 15 years – are crucial to managing a company that is as diverse as we are now, and as expansive as we are. We went from being a traditional van trailer business to managing a portfolio covering tankers, aviation refuelling equipment, truck bodies, high-tech composite materials, and downflow booths for the pharmaceutical, biotech and fine chemical markets. We now even make mobile clean rooms and are currently expanding strongly in the final mile segment as well. All that considered, a Wabash National CEO has to be very organised, very focused, very deliberate and very action-oriented; and Brent has all of those qualities. That’s why I say he will do a great job in leading the company going forward.
Q: That’s exceptionally high praise for you, Brent. Are there any unique characteristics about Dick you have found to be inspiring whilst working with him?
BY: I think the one thing that I’ve picked up on frequently with Dick is that he deeply cares about everyone at Wabash National. It’s come out in so many of his actions, especially during the early transformation years and the 2008-09 downturn. The way he led the company in a very caring way to ultimately transform it into a much more diversified manufacturing operation is nothing short of inspiring. It’s something I look back on and say, ‘Well, that’s something I need to be able to emulate as best as I can’.
Q: Do you feel well prepared for that next step?
BY: Yes, I think Wabash National went through a very diligent process as to how it wanted to manage the succession post-announcement; and they’ve worked very closely with me to guide me through it. Of course Dick has had a direct hand in shaping my development, too – in fact he’s been very caring and conscious in how he’s mentored me over the past 15 years of my life. So, I think every day has been a preparation for this moment, whether I knew it or not. At least that’s the retrospective view. All those experiences and lessons learnt have led up to this one, defining moment for both of us – it’s humbling when you look at it like that. So while there’s a growing level of anxiety, as it would be for anyone to jump into this type of role, there’s also this calming feeling that says, ‘we’ve succeeded together and it’s just a natural transition now’.
DG: I’ll just add that Brent’s asked me more questions in the last two months than he did in the previous two years combined.
Q: With that in mind, is there a specific topic the two of you have discussed more in-depth than others during that phase?
BY: As you rise through the ranks of any organisation, you quickly learn that there’s a lot of work happening behind the scenes that you’ve either been shielded from or just didn’t need to be involved in. For example: I already knew how much time Dick would invest in managing the external environment – that’s an area that I’ve been directly exposed to – but I wasn’t as involved in his work managing internal stakeholders such as the Board. As such, my initial interest was more towards mastering the internal dynamics you don’t necessarily see every day. Knowing and understanding the business on such a granular level is critical for success.
Q: Dick’s managerial ‘masterpiece’ has arguably been the transformation of the Wabash National brand into a diversified manufacturing business during the Global Financial Crisis (GFC), and subsequently cementing the company’s role as the best-selling trailer brand in North America. Which role did that period play in the conversations you’ve had since January?
DG: It’s certainly crucial to understanding what Wabash National is all about, and something I am very proud of, so we talk about it regularly. Our strong financial performance over time or how we managed to diversify the organisation makes for a fascinating story, but our biggest success is something else. It’s the cultural transformation we’ve achieved – both in business and in life. That’s the real bottom line for me.
Q: Please elaborate…
DG: I truly believe our culture is what made Wabash National succeed in getting through the downturn, everything else built on that. When the crisis struck, our associates believed in me and us, our customers believed in us, our suppliers believed in us, and the community believed in us because of the work we’d done on building a culture that focused on doing the right thing all the time – even when it was hard.
BY: It’s been absolutely fascinating to learn how Dick established values that are translatable into action anywhere we do business. To him, operational excellence is a result of caring for people, a consequence of building and nurturing great teams that are empowered to do what is right. Those are qualities that play anywhere, from the Midwest of the United States through to Europe and Asia.
DG: I’ve always believed that if you do the right thing, success will follow. Sometimes those right decisions are difficult decisions to make, but they generally will lead to good things and, ultimately, to success. It’s driven me through my whole life, and it’s the way I have to run a business, too.
Q: How do you decide what’s the right thing to do, though?
DG: Always make good, ethical decisions. Always treat people the right way. Make decisions that are in the best interest of the company as a whole, not just one individual. Don’t make decisions for yourself, but for everyone. Those basic principles will lead you in the right way. I guess it goes back to the old rule, the golden rule, to treat people the way you want to be treated.
BY: When you make a decision, you have to take all parties into account. You’ve got to understand those unintended consequences and weigh up what’s the best for the whole.
Q: Can you recall a specific decision taken according to that blueprint?
DG: We all painfully remember it – it was during the GFC. As rapidly as it came upon us, decisions had to be made and had to be made quickly, and in many cases, they were painful decisions, decisions we knew were going to impact our people and their families personally. And the decision I made is that we would impact those the most who could handle it financially, and those who couldn’t the least. In other words, the ones who could bear the brunt of the impact had to step up and take the biggest hits, the biggest reduction in pay. So, we started with the executive team, first with salary freezes, then salary reductions, then benefit cuts and freezes. The rest of the salaried organisation was next. Last in line was the hourly workforce; they were the ones that were impacted the least, because they could least deal with the personal impact.
Q: So the largest cuts were made at the top?
DG: Yes, and the least at the bottom. And when we came out of the downturn, we did it in reverse. Those that were at the hourly level were the first ones to be made whole; the executives were the last to be made whole. It turned out to be an important ingredient to our long-term success and helped shape our culture. The workforce, our associates, they believed in it. They knew what was happening, and it really helped having their full support to get through it.
BY: If we had made the wrong choices back then, if we had destabilised our culture at its core, I don’t think we’d be where we are today in any shape or form.
Q: Did you take a pay cut back then, Brent? How did you experience that decision being made?
BY: It was an emotional time for everybody, as fast as the world was moving in a negative spiral. You’re digging up some past memories here.
Q: But you were part of the organisation at that time?
BY: Yes, I was the Vice President of Manufacturing at our Lafayette plant at the time. What I remember is that Dick was very stabilising during that period. He was very deliberate in making sure we knew he had a plan and was taking action. He gave us purpose, he gave us direction, he gave us confidence that we were going to pull every lever that we possibly could to save and prevent this company from going to the wayside.
Q: That’s a very energetic take on a very tough situation…
DG: I’ve told the leadership team on numerous occasions that what we all experienced through that extended period, during the recession, actually made us more knowledgeable of our business, made us more capable in managing through anything that this crazy, global economy could ever throw at us. It was a tremendous learning opportunity that – while we’d never raise our hands to go through it again – people hardly ever get to experience at all. At the end of the day we kept all of our suppliers, all of our customers, and all of our creditors whole throughout the process, and we can take a lot of pride in that. So, today, I tend to look at it with a glass half-full kind of mindset. It was, in a strange way, a wonderful learning opportunity for all of us.
Q: Is there anything you’ve come across in your career that you’d warn Brent of? Any decision not worth taking?
DG: That’s a great question because I’m an introspective individual, so I’m always trying to challenge myself, second-guess myself; did I do the right thing? Did I make the right decision? Looking back, the one thing is probably resource planning. When I came to Wabash National as COO, I was really the day-to-day guy, driving numerous improvement initiatives throughout the organisation, championing our continuous improvement activities, developing better systems for managing the business and so on. When I became CEO, I effectively retained those responsibilities because of the structure we had. When we then entered the downturn, there was no thought wasted to be filling the COO role, so I continued carrying those responsibilities. That was fine when we were a smaller, simpler business, but as we began to grow, expand and diversify, I certainly wish that I had taken steps sooner to fill that void – which we eventually did with Brent’s appointment as COO in October of 2016. If I’d been able to do that a couple of years sooner, I think we could have accomplished even more than we have.
BY: I agree with Dick that as we move forward, and as we look to grow the company, managing complexity is going to be a critical factor for success. We have to make sure that we have great talent in the right spots to allow that to happen.
Q: Does that mean you have already picked a future COO?
BY: No, we’re not at that stage yet. We are focusing on the CEO transition for now, then we’ll evaluate the company accordingly, and our organisational structure, and make the right decision.
DG: Nice try, Sebastian.
Fast Fact
In December 2017, Wabash National went public with the announcement that long-serving CEO, Richard ‘Dick’ Giromini, would step down from his role on 1 June 2018. As part of a planned succession, Wabash National President and current COO, Brent Yeagy, was announced to become his successor on 2 June. To support Yeagy in his new role, Giromini said he would remain with the company, serving in the role of Executive Advisor, through to June 2019.
(Image L-R: Brent Yeagy and Dick Giromini.)