Knowing the customers
That final factor -- getting to know customers’ desires -- is the major reason the company moved its headquarters to suburban Detroit, Stebbins said, and the results are paying off. Stebbins said he and his team have welcomed several of the major automakers, including General Motors and Fiat Chrysler Automobiles, to the new offices to show them around and to fill them in on the company’s new direction and products.
The Detroit 3 were three of Superior’s four largest customers in 2014, combining for about 78 percent of the company’s net sales and about $569 million in revenue. Ford was its largest customer with 44 percent of its net 2014 sales, followed by GM (24 percent), Toyota (12 percent) and FCA (10 percent), according to Superior's annual 10-K report.
"We hardly had any customers come visit in southern California, and I get it,” Stebbins said. "They’re busy, and so to be here (just north of Detroit) is convenient for everybody.”
Parveen Kakar, Superior’s head of sales, marketing and product development, said the company’s location provides the company with an advantage it lacked in California.
"One of the things that Don’s bringing is that we want to be leaders,” Kakar said. "The fact that I’m 15 minutes away from the OEMs, that they can actually come here... it’s a huge difference."
Stebbins, who lives in southeastern Michigan and commuted twice a month to California when the company was located there, said the move had nothing to do with convenience for him and had everything to do with strategy. After all, it’s easier to sell automakers on when you live in the heart of U.S. auto country, he said.
Employee turnover, changing culture
Such a major move does not come without consequences, however. All but about five of the employees who worked at its California headquarters decided to stay in California when the headquarters moved to Michigan, Stebbins said.
“You’re disrupting their lives by moving the headquarters here, and I understand their decision” to leave the company, Stebbins said.
The end result is a staff at the company’s headquarters that’s 95 percent new, many of them with extensive experience outside the wheel business like him, he said.
For someone like Stebbins hoping to create a new culture, one that’s more collaborative and more focused on innovation in production and in the products it offers, that’s not necessarily a bad thing.
"From a cultural perspective, rather than trying to change people in how they think, we’ve got people with brand-new ideas,” Stebbins said. "We get to kind of pick the best of the best. What I’ve found is that it’s a lot easier, quite frankly, to fix the culture because the people don’t have the culture inbred in them.”
Stebbins said he wants the company’s employees to think about things differently, to create products that the company wouldn’t have thought much about creating in the past and to create them in new ways. His team has studied how Chinese suppliers lay out their facilities and are determining ways to make facilities more flexible as they are asked to create increasingly different types of wheels.
Thinking differently also means working in a more collaborative way than in the past and allowing more engineers to work on r&d, as opposed to solely on production. In doing so, the company can produce new products such as those flashy wheels that Stebbins hopes can give the company an edge in the marketplace.
"We’ve got talented engineers, there’s no question about that,” he said. "We just need to make it OK to have them work on r&d projects. A lot of people can show the wow factor, and now we’ve got to work with the customers to get them into production.”
A big stumble?
While there are risks involved in overhauling a company in such a small period of time, Stebbins said the company has yet to have "the big stumble.”
Analysts seem to agree.
B. Riley & Co. analyst Jimmy Baker rated the company as a “buy,” as do two others. Another two rate the company as “hold” or “sector weight.”
Its stock has largely held steady in recent months, trading between $18.50 and $19.50 for most of the year.
Through nine months this year, net income more than doubled to $15.8 million from the same period last year. That’s despite revenue dropping to $533 million from $559 million last year.
Baker said in a note dated Nov. 4 that the company the company appears to be in good shape because of strong margin expansion thanks in part to the company’s new facility in Mexico and Superior’s F-series shipments, the company’s largest program, jumping 32 percent in the third quarter.
Stebbins said he’s been satisfied with the direction of the company and the product line. He said that’s in large part to the company’s stable balance sheet, one that he contrasted with Visteon’s, which he characterized as a turnaround. Superior, he said, doesn’t need to be turned around.
"It’s different whereas at Visteon it was all about cut, cut, cut,” he said. "We’re not cutting. We’re building.”
Stebbins said he has had to adjust his leadership style to an extent at Superior, which makes different products than his previous companies and is more capital-intensive.
“When you’re in that position, you do a lot of listening, a lot of walking around and a lot of talking to a lot of people” he said. “That, I think, has served me well.”
Stebbins said he’s more collaborative than ever, learning about a product he had no experience with before and working to move that product and the company forward.
“You’ve got some basic principles that guide you in your decision-making, but gathering the information is important,” he said.
Whether that collaboration will allow the company to become a leader in the industry remains to be seen. Perhaps, as the tired old cliché goes, Superior could indeed reinvent the wheel.