In 2002, it looked like the end for a floundering AxleTech International. That December, Wynnchurch Capital acquired the manufacturer of planetary axles and suspension systems and brought in Mary Petrovich as CEO to turn the company around.
In her first year on the job, she renegotiated a 33 percent reduction in U.S. labor wages and benefits. She also drove global sourcing to reduce materials cost by 10 percent.
And she embarked on a strategy to attack new markets and customers, focusing on fast-growing markets where AxleTech didn’t have a strong presence, and today, 40 percent of the company’s business comes from foreign markets. She also zoned in on the military sector, which soared from making up 20 percent of the company’s revenue to 65 percent today.
Because AxleTech caters to a niche market of military, commercial heavy-duty and other specialty vehicles, it custom-engineers many of their products. That often means longer lead times of three to six months. But Petrovich reduced that wait by outsourcing and acquiring suppliers.
Despite a recession that kept the revenue flat early in her role, Petrovich rejuvenated the company’s cash flow and achieved 10 percent operating profit margin. Those changes, along with others that broke the mold for the industry, rocketed AxleTech toward unprecedented profit. Under Petrovich’s guidance, the company’s equity soared to more than 100 times the initial investment, and today, the company is the No. 1 supplier of planetary axle and suspension systems in the U.S.
Going forward, to make the company more responsive to the current economic climate, Petrovich is focusing on information management. She’s stressing the importance of employee accountability, operational efficiency and sales performance by establishing quarterly operations reviews, quote reviews and new business reviews, providing the company with plenty of data that allows it to react and adapt.
How to reach: AxleTech International, (248) 435-1663 or www.axletech.com