At a high level, there’s plenty for manufacturers to be optimistic about heading into 2018, but there are always some industries that are down and it’s good to balance optimism with “a little bit of healthy paranoia,” says Brian Kobylinski, chief executive officer of Jason Industries Inc.
Jason is a Milwaukee-based diversified industrial company serving a variety of end markets, including heavy fabrication, oil and gas, construction, automotive, heavy industrial equipment, rail, turfcare and motorcycles. The company’s businesses provide finishing, component, seating and acoustics products.
Kobylinski came to Jason in the spring of 2016 after spending 23 years at Menomonee Falls-based Actuant Corp., and was promoted to CEO a few months later. Jason has been through a number of changes in recent years, most recently a series of initiatives that seek to reduce costs and expand the company’s margins.
Kobylinski presented at the Northern Trust Economic Trends Breakfast presented by BizTimes Media on Jan. 19.
He pointed to indicators like the Institute for Supply Management PMI – which has been in positive territory for 16 months and trended higher in 2017 – as reason for manufacturers to be optimistic. He noted some end markets, like heavy industry, fabrication and general industry, as areas seeing growth.
“The sentiment is more positive today than it would have been nine months ago,” Kobylinski said.
At the same time, Jason is dealing with other end markets that are challenged. The rail industry is in year two of what is typically a four-year down cycle, U.S. light vehicle sales were down almost 2 percent after back-to-back record years and motorcycles face changing consumer demographics.
All diversified companies deal with some of their markets being up while others are down. Kobylinski said part of the challenge is identifying when and where to shift resources to take advantage of growth opportunities. The challenge is made more complex by long-term trends reshaping industries, like the emergence of ridesharing and autonomous and electric vehicles in automotive, or aging customers in motorcycles.
“When you look at industrial companies, we’re facing more of the transformation market dynamics that tech used to have,” Kobylinski said.
In some areas, manufacturers may not have the internal resources or expertise to address those long-term shifts. Kobylinski said in automotive, Jason is looking to build its relationships with others to be able to respond as the market shifts.
Motorcycles, in contrast, are an area where Jason’s seating products have a direct influence as companies like Harley-Davidson Motor Co. work to attract new riders. If new demographic targets require new seat profiles, Jason has to anticipate those needs and respond.
Manufacturers are also facing challenges and opportunities within their own facilities as technologies like automation, robotics and artificial intelligence continue to grow. Kobylinski said companies should embrace, not ignore, these changes, but implementing them doesn’t have to be a massive undertaking. He recalled during the very early stages of online commerce, a company he worked at moved something from a fax distribution to an online offering. It was a small change, but made things easier for customers.
“It’s those practical approaches I think a company like ours will take,” he said.
