Since being named the first non-family-member CEO of Adac Automotive Inc. in August, Jon Husby has had to contend with a barrage of obstacles.
That includes fluctuating volumes from automakers coming out of the pandemic, a continuing war in Ukraine, a six-week UAW strike, and a need to keep up employee morale in an evolving auto sector, Husby said. On top of all that, the Grand Rapids, Mich.-based company experienced a cyber attack that shut down production for about 36 hours in April 2023.
Husby came to Adac from Novi, Mich.-based SEG Automotive, where he served as president and CEO of North America. Entering a family-owned business realm in West Michigan, Husby said he was faced with tough choices within months of taking the job. That included a 10 percent cut of the company's salaried workforce and the divestment from two of the company's three joint ventures at the time, which led to cost savings and new investments in the company's automotive and diversified portfolios.
Adac ranks as No. 50 among North American injection molders with $200 million in sales in the region, according to Plastics News data.
Now, Husby is keenly focused on diversifying the company into new markets — such as marine, defense, medical and 3D printing — for the long haul. He recently spoke with Crain's Grand Rapids Business about his first year and a half on the job and his future outlook. This interview has been edited and condensed for clarity. CGRB is a sister publication of Plastics News.
Q: Your first year and a half at Adac has included some, let's say, excitement. Can you recap your experience so far?
Husby: The first thing is recognizing I stepped in as the first non-family-member CEO of the business, and a lot of that was to start thinking differently about where the company goes for the future. Historically, two families have been involved in the ownership and, like many auto suppliers, the last four years have just been tough. It's been very difficult with the volumes of COVID, the volumes of semiconductors. Ukraine has had an impact on shipping and distribution around the world and impacting volumes. Then you had a UAW strike in the middle of all of that in the last year. And then to top it off, we also as a company had a cyber intrusion. Having to wade through those storms, there's a lot to figure out.
Q: What kind of outlook did you bring to the table as the company's first non-family CEO?
Husby: The first thing I did was to respect and honor the history and legacy that the families brought to the business, recognizing that family style, that family feel that exists in the culture. You can't lose that. That's part of what makes the business tick. The first thing I had to figure out was what is that culture? How does that operate? And that's exactly what I did. I started to just really be a sponge, talking to people, figuring out what that looks like. The next thing, though, was needing to quickly identify what are the true issues going on in the business, and hit them head on. They brought me in for a reason. They brought me in to fix things, to transform things. You have to go hit that head on and not be willing or not being concerned about putting it on the table, not being concerned about sharing what those concepts need to be, and then having the hard discussions.
I think part of it is taking hard actions. Unfortunately, early on, I was probably about 75 days on the job and had to take a hard position where we did a restructuring and we took out 10 percent of our salary workforce (about 25 people), and 70 percent of those were management. Part of that was just really flattening the organization, getting the organization from a cost perspective more in line, but also from a mindset perspective, starting to set the new mindset of what we need to do going forward.
Q: Can you go into more detail about the cyber attack on the company?
Husby: We ended up losing about 36-plus hours immediately of production, but quickly got up to speed. Less than a day and a half, we were back up to speed. And that was in manual mode, and that's challenging in an automotive environment. It's challenging when you're doing things like sequencing. … Our team went into overdrive and the first thing I'll always tell anyone that goes through a cyber event is you have to be prepared to go into manual mode at all times.
Q: Did that change the way you thought about how the business operated or lead you to think about more investments on the tech side of things?
Husby: I think the fun part of the story is, when you're faced with a situation where you have to truly prioritize what duties you're going to do and get through the day, you quickly figure out what things may not be value added. It really forced us to look at what was truly value-added in our business and there have been a few examples of things we've changed, the way we did some reporting within the company. … We've become leaner in that mindset, but it did force us to really rethink: What are we doing from an IT perspective? What are we doing within our operations? What are we doing within finance especially?
Q: In the context of widespread onshoring happening in manufacturing, you've said recently that you're getting more questions from automakers about the 'genealogy' of companies you work with. Can you talk about that shift going on?
Husby: It's really interesting to see. It's gone from a discussion about, 'Can you get suppliers out of Asia to be part of your business?' To, 'Can you find suppliers that are local to this business?' It went from, 'Can you import your own product out of China?' To, 'What is it going to take to do that here?' We've been involved in not only our own business, but in discussions with our Tier 2 base of having to look at how we can localize more, and it is becoming very serious. I mean, it's a real claim and concern for the automakers. They're certainly trying to get enough localized content. This is very real for us. What's great for Adac is it's opening new opportunities.
Q: With all that's happened in the industry over the past four years, what's next on the horizon and what's keeping you up at night?
Husby: For us, it is about imagining the use cases that people don't even know they want yet. I call it the Apple model. How do we help create solutions for the future that people don't even realize that they need? I mean, we've gone out and added lighting specialists to our team so we can add accents to lighting, we can play in different spaces. That's really important for us.
When I joined the company, one of the first things I said is we need to diversify our portfolio, and that includes moving outside of automotive. As we looked at this, and I remember in my first board meeting, it was about 45 days in, and I shared with them: 'We have got to create a strategy.' We did just that and we got approval to start moving into additive manufacturing. We've now become an expert at 3D printing, but we bring an entire engineering solution to it.
The commitment is on auto, so I will never talk about our auto revenue and profit going down. In fact, it's the opposite of that. We see considerable growth in that, but we see amazing growth in our diversified business to the extent that we believe it's going to be 20 percent of our revenue stream by 2028.