Commercial Vehicle Group, Inc. (CVGI)

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Commercial Vehicle Group, Inc. (CVGI)

CITI 2013 US and European Industrials Conference

September 17, 2013 3:30 p.m. ET


Rich Lavin - President and CEO

Chad Utrup - CFO


Manish Somaiya - Citigroup


Rich Lavin

Okay. Thanks Manish. It’s good to be here this afternoon. I am – as Manish mentioned I joined CVG at the very end of May. So I’ve got about three and half months with the company. I worked for Caterpillar for 29 years and a good part of my career was spent living and working in Asia. I knew CVG when I was running the global construction business at Caterpillar, and so after I retired when I was approached the opportunity to go to work for CVG, I really jumped at it because CVG and Caterpillar had a reputation as a reliable trusted supplier and I think in the short time of being with the company, I have seen that that reputation has been well earned. So I am pleased to be here and I am pleased to be with CVG as well.

I am going to start my presentation just with a look at the organization. As you know, we announced a change in organization about six weeks ago, and we went from what I would characterize as a very product-focused organization where our group presidents were responsible for products to an organization where our group presidents now have global market accountability. We’ve organized around construction and ag, truck and bus and also the aftermarket. So the three presidents with responsibility for our global markets or global customers are really expected to take a customer-backed view of their opportunities and make sure that we have product plans in place to meet and exceed our customers’ expectations going forward.

A couple more comments about the organization once I get into the presentation. We’ve got a little bit of [matrix] [ph] challenge in the organization as well because we have MDs in Europe and in China. Those leaders are working very closely with the presidents on their plans for markets and customers in their part of the world and they’re really going to be on point in driving their strategies going forward. And Chad, on the service side of the organization, of course, has been with CVG for 15 years, about 13 years in position as CFO. So if there are any tough questions, you know who is going to field them.

Just a couple of slides about CVG. As I mentioned, I’ve only been with CVG for about three months. But I think there were a couple of things that have jumped out of me regarding how the company is positioned and how we need to be going forward at least over the short term to drive the value, at the top of the chart, that we are committed to drive for our customers and also for our shareholders.

On the right hand side, we say we’re going to be opportunistic. I mean this is a company that’s been built through M&A, about 18 deals over 15 years. So they have been pretty aggressive in the deal space. We’re going to continue to be focused on M&A but it’s going to be very, as I mentioned, opportunistic which is just another way of saying I think it’s got to be directly tied to our strategy which over the past of couple years and going forward will be focused on diversification – diversification of our product line, diversification of our customer base and also diversification of our geographic reach.

We’ve got a very strong values-based culture at CVG, creativity, innovation, integrity, teamwork I think is a very important for those to be called out as expectations for the people in the company because at the end of the day it’s about serving each other even as we are serving our customers.

We’re going to be focused on execution. I think we want to really gain a reputation, enhance our reputation as an execution company – a company that delivers on its commitments, a company that get things done when and how they say that they’re going to get it done, and finally we’re going to be global. I’ve got a chart in here that shows our current global footprint. I will be happy to take questions during the Q&A period about how we’re going to drive our global business going forward. But the opportunity in large part for CVG going forward is going to be outside of North America. It’s really going to be in Asia and principally it’s going to be in China.

Just to look at our product line, for those of you who are familiar with the company, I think you know our product lines pretty well. But we’ve positioned ourselves as a supplier of integrated system solutions for the global commercial vehicle market. And you see the breakup of our products along seating, electrical trim, cab structures and panels, and mirrors, wipers and controls and at the bottom is the percentage breakup by revenue of our product line. So you can see we’re heavily weighted in seating where we are selling five brands in different markets around the world. I’ve got a chart later on which really shows how we are positioning our seating product at distinct value points to make sure that we are covering as much of that opportunity as we possibly can.

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