Zeffiro met with CFO’s Karlo Bustos, Sarah Johnson, Marie Leone, and David Katz in New York on September 10. That was the day after President Obama’s speech to Congress on health-care reform, which Zeffiro discussed along with his views on cash dynamics, operating efficiency, and other matters. An edited version of the interview follows.
Your company is headquartered in Michigan, one of the states hardest hit by the economic downturn. How do conditions look on the ground?
I’ll tell you, Michigan has had a tough road of it. It’s interesting, though, as you travel around and you spend time talking with investors or with people who have just been reading the news, you’d think that most of the state was out on the street with tin cups. That’s a bit extreme.
But isn’t the grim picture largely accurate?
It actually isn’t. You see certain segments that are actually doing pretty well. [General Electric chief executive] Jeff Immelt was up there a month or so ago and launched an 1,100-person technology center for research and development. There are also the video and film industries. And our state is surrounded by fresh water, and freshwater technology is taking huge steps forward in Michigan. Of course, if you put it all in the context of the Big Three [automakers] and all the layoffs, it’s not what it was 15 years ago, with 300,000 professionals in the immediate area. There’s been an impact, no doubt, but not as drastic as one would otherwise expect.
So there are white-collar opportunities in Michigan, including good prospects for CFOs?
Well, good prospects for CFOs who are not from the auto industry. One thing I’ve learned from having interviewed certain folks from those industries for possible roles within TriMas is that they operated differently. There was a lot of heritage and legacy as to how they actually ran their companies. And quite frankly, it wasn’t as efficient as the enterprises that I grew up in, like GE and Black & Decker.
The Detroit News and other media outlets have reported that Ray Young, the current CFO of General Motors, may be on the way out. Young came up through the ranks during a 27-year career with the automaker. That seems to underline your point.
Exactly. If you’re talking about reengineering or transforming a company, can you do it with the same guys who have been running the company or been in the ranks for 30 years? On the other hand, those are pretty complex organizations. So you need somebody that’s capable of understanding the nuances that are privy to GM, Ford, and Chrysler.
TriMas has a strong involvement in the smokestack industries. The outlook hasn’t been very good in that sector for years, and seems bleaker in the context of the current downturn. What’s your path to success?
We play in focused market spaces, where we have products that are important to our customers. But you’re right. Those industrial segments are ones that are under pressure in the recession at large. I’d say this, though: our cash-flow dynamics and our product innovation and, ultimately, our technological advantage have given us a real opportunity to compete. What we have to do is to drive operating principles and efficiencies and productivity in those businesses that have been the mainstay of most of Corporate America for many years.