20 QUESTIONS booms. The reason we went to Australia was because they are slowly exporting their country. Iron ore has gone out of there ship upon ship and the railroads are the means to move that. That hasn’t been immune but hasn’t had the impact that the European economies have felt.
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NNYB: As gas and diesel prices increase, does that affect the demand for things being moved by rail rather than by truck? HAWTHORNE: We see that. We feel it indirectly because when you start to look at energy prices for transportation, the more traffic that was marginal on a truck becomes attractive for rail. There is more and more demand and if you look at a railroad’s financial statements, they’re taking advantage of it. Oil and gas and exploration and delivery has produced a lot of demand for rail. We shed a tear when we go to the pump, but we know the higher energy prices are the more attractive rail looks and more in demand our products are.
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NNYB: Is the rail infrastructure in the U.S. in fairly good shape? HAWTHORNE: There are a lot of studies done, what I would get behind is the growth patterns and rates we’re seeing with the expectation of what rail could be. They will not be able to build enough tracks to manage the capacity demands they expect. In lieu of having more infrastructure, they’re investing in technology to move trains safety. Safely move the trains closer together, get braking distances down, which is a big role, we will have more capacity in the same infrastructure. It’s difficult to get permissions to build more tracks, double and triple tracks areas are where they find permission to do that, but the corridors are somewhat fixed. What you’re going to find is railroads will say, ‘How do we get more trains in the same territories and safely?’ That
really benefits us because our technology product lends itself to that strategic approach.
where our headquarters are, into the local community. The people that live in the area are always willing to open their hearts to get help when they need help.
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NNYB: Are you in a position where you see growth in the future? HAWTHORNE: It’s going to be a balance. We are intending on our clients calling for investment and seeing staff up for new products and services. I have strong goals for growing salaried staff, but engineering is the bottle neck. Hourly labor force will flex in and out. We do everything we can to sustain people but we will follow the economic cycles. We are doing well and we hopefully will see sustained level of demand, but it is starting to soften. We will have more people working on new developments to bring products and services forward. Manufacturing will probably wane a bit but will pick back up when the next cycle is on the upswing. NNYB: The north country community is very charitable. What kinds of philanthropic efforts is Air Brake involved in? HAWTHORNE: We are big supporters of the United Way. We take an active role to support them directly through the business and in the work force. We at least are aware of the opportunity and we do a lot of matching. We have an open policy for employees that have charitable causes we have to screen them, of course, but they make a contribution, we match it. We try to encourage charitable behaviors that we think are important in the community. We typically try to have some participation on boards and pay back to the community. The gentleman that owns the company is a very generous man. He recognizes that his success in any community around the world is tied to how the business is perceived. Trying to pull cash and profits out of a community is not a sustainable strategy. I am always impressed by how much support we get out of Munich,
NNYB: How did an engineering background prepare you to lead in management? HAWTHORNE: I find in engineering we are especially good at analysis. You are learning how to take a problem, analyze, make a set of solutions and determine what solve the problem best. When you move into the business realm, I find there are a lot of similarities. Taking a business, like Train Dynamic Systems for example, you have to have a concept so you understand the problem and develop the concepts, do the analysis and gauge which solves it best and inevitably in that you find you’re wrong, turn the loop and try and improve on it. The engineering concept of a design from concept to reality is very much the same as a business. NNYB: What makes for a great leader today? HAWTHORNE: We have had a lot of discussions lately on what makes a great leader. A great leader needs a vision and needs to be able to communicate and articulate that vision. If you can’t ask the teams to do something specific, you don’t have a chance. You have to have the vision and a way to communicate it and subordinate yourself. I found ascending into different leadership roles that your job becomes less and less solving the problem and more eliminating barriers that are limiting other people from solving the problem. You have to hold the organization up and you have to be critical and do the bad stuff; you have to tell people they aren’t doing a good job. You have to hold it up and say ‘This is where we want to be and why we want to be there. I’m going to do everything I can do to make you successful and get barriers out of your way and make sure you have the right funding and assets.’ I think a leader’s role then becomes subordinated to making sure the rest of the plan is being met.
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NNYB: What do you do to unwind? HAWTHORNE: There are a couple of things I really enjoy. My kids, aside from being teenagers, they do offer some level of relief. They’re both great kids. I like weight training, I run a bit and martial arts. I do things that I build. I have gotten back into reading. Now with the iPad I don’t have to carry around tons of books. Unwinding for me is letting go of the day and doing something else. I think it’s an important part of being healthy to sever from work. It’s not a criticism of the team here, they are more than capable of operating without me. But it’s my need to cover all the bases. I think part of it is being new to the job. Some of it is just my drive. I have my iPhone or Blackberry far too often. I don’t necessarily want to disconnect entirely. But I do recommend time to pull back and get yourself out of that mindset.
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NNYB: If you had a wish list at this point of improvements or where you’d like to be five years from now in this organization, what would be on it? HAWTHORNE: We need to keep growing and I’d like to find the ability to design products, manufacture products and deliver services to be better and more flexible. As we develop next-generation product, where do we take it? Where do we move it? How do we get it online? I want to find that we’re a more agile organization, going faster to market and move the product forward. I think every leader wants that. We have good plans to increase our velocity. In five years I’d like to see the $300 million a year grow by 50 percent. We will have to sell different things. We want to leverage every aspect of our business. We want to grow the job base here; we want to find the NYAB is a premier employer in manufacturing direct line and salaried staff. I would love to see that NYAB footprint grow in the Watertown area. — Interview by Ken Eysaman. Edited for length and clarity.
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NNY Business | September 2012