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A HOMEGROWN LEADER Ew York Air Brake Boasts a Storied History in Northern New York, at N Michael J 20 QUESTIONS NORM JOHNSTON | NNY BUSINESS A HOMEGROWN LEADER ew York Air Brake boasts a storied history in Northern New York, at n Michael J. Hawthorne, new NYAB one point employing thousands to manufacture train and truck brakes. president, committed to growth, success Today the firm remains a vital part Nof the region’s economic landscape. On July 1, ing Paul make both the tactical introductions to the way a manufacturing facility down in North Carolina near 18-year NYAB veteran Michael J. Hawthorne, a the business runs and teach me why we are structured Charlotte. I’d say all of those have helped build the Harrisville native, assumed the job of president. the way we are and then the personal introductions to portfolio of products from the footprint in New York Air the broader business elements because of our board of Brake. We are in this incredibly cyclical market and We sat down with Mr. Hawthorne for his first in- directors and our shareholders. when the industry starts to decline, people don’t build depth interview since he moved into the top post. [train] cars. Then the manufacturing floor here starts to NNYB: How does a young man from Harrisville lose its work, so all the other products have now come wind up on the path that you’ve taken and leading a NNYB: How has the company transitioned from the in to help to smooth out and bolster the capability of major company? leadership of J. Paul Morgan, who was president for the company. We also know, and this is with all the more than 20 years, to a new leader? How does HAWTHORNE: I would say most of my interest in humility I can muster, we have the best products. And that happen? 2technology came when I started high school. We had when you look at our products against our competitors, 1HAWTHORNE: The thing I always say in any of these a very capable chemistry and physics teacher who got we have superior products, superior technology. And discussions is that Paul did an amazing job. I grew up a bunch of us interested in computers and at that point we’ve invested a lot in the engineering piece. in the area, so I can remember back when Air Brake I was starting to find my engineering legs and decided NNYB: So of all these locations, how do you play was dominant on the landscape and really sort of split Clarkson was a good place. Leadership to me is really these subordinate locations into this facility? away and at the time that Paul took over, I can remem- irrelevant of discipline. I found that in every opportunity ber coming in looking for a footprint in the market, I’ve taken up the role of trying to organize and lead. HAWTHORNE: We have two LLCs. ABL in Kings- bringing in the products and we were just a licensee of Going into the technical realm helps satisfy my inner ton, Ont., is just a stand-alone business, but they sup- need to be designing things and building things and 4ply us. And Anchor Brake Shoe in West Chicago is our competitor. So, he got the company back on good footing and slowly turned it to where it became profit- then as you get the opportunity to lead people, organi- an LLC. So we can consolidate their financials into able, and I think the man has made at least a black zations, taking that same design need and then building ours, but those are two businesses that operate with zero for the entire time he has worked here, which is a way that the organization is structured in the business shared services from Watertown. The others are con- incredible given that he had to transition from old and and trying to make it so it can stand on its own. solidated into the New York Air Brake portfolio. All tired to new and modern. I spent the first part of my of these report up through our organization to me. NNYB: From your perspective from inside the ranks career working in engineering with only peripheral ac- More than 800 employees. growing into the position you’re in now, how has the cess to Paul. We bought assets of a company down in Air Brake been able to manage itself through the lean NNYB: With all of these outposts in various locations, Fort Worth called Train Dynamic Systems, so I became economic times while also growing its staff and main- you must travel a lot? involved with them to cut the directorship, which was 3 taining profitability? HAWTHORNE: Too much. I just got back from China the business lead, and that’s when I started to interact more regularly with Paul. That became my opportunity HAWTHORNE: When I was part of some of the merg- 5on Saturday. One of the things that most people prob- to learn from him and his behavior. As I got closer to ers and acquisitions teams, we took some very strategic ably don’t understand is that Knorr businesses are really this role, we moved me into operations lead to get a positions to add companies. So, “New York Air Brake” built around a center of competency and content. So better understanding of our manufacturing floors and people think of as Watertown, but we have a manufac- we have products that nobody else makes. We build, all our responsibilities here and he brought me to the turing site in Chicago that does brake shoes; we have a design and control those products, but we transfer them board meetings, to the world meetings, to the different repair center in Kansas City that does both locomotive to our sister companies. So, we have a plant in China, elements because Knorr-Bremse is a very big company, and freight repair; Kingston, Ont., has the manufactur- a plant in Australia, plants in South Africa and Brazil, it’s a €4.5 billion-a-year business, and New York Air ing site of our locomotive brakes system; Train Dynam- all of which build other products, but they build our Brake will be over $300 million this year. We’re big ics Systems, that’s now in Irving, Texas, does mostly products as well. Not only do we benefit from having but they’re giant. And, the transition was really hav- software for on-board control systems. And we have this expanded portfolio of product development 40 | NNY Business | September 2012 20 QUESTIONS just by acquisition, but we also enjoy the marketing and sales channels from a global perspective. Again, Knorr, they have a giant footprint, so we export a lot. That’s been one of the big benefits, as you’ve mentioned, how we sustained ourselves through tough economic times. China boomed when the U.S. was starting to slide, and that helped us tremendously. NNYB: It’s not a big secret that New York, especially since Andrew Cuomo became governor, is working to sharpen its edge and become more business-friendly. With respect to doing business in New York, are there 6 any challenges you find particularly rough? HAWTHORNE: New York is not the best business en- vironment. That said, Watertown has done a lot to keep New York Air Brake here, and I think New York gen- erally does what they can. The biggest challenge we face is trying to convince and attract talent. Watertown has produced some fine people, but when you go to Clarkson and you start to query fresh-outs, there’s not a lot of kids that want to say “Hey, I’m staying above the Thruway” and “Watertown is a great place to meet my wife.” When I talk to our engineering teams, our proj- NORM JOHNSTON | NNY BUSINESS ects are a lot of fun to work on, but it can be difficult to New York Air Brake President Michael J. Hawthorne discusses goals for his firm in his Watertown office. attract enough talent and to sustain a level of growth. I met with Patty Ritchie and she asked the same question: to their job fairs and recruit, so we’re finding more “Is there anything we can do to bring more talent into talent to draw from but I think it is going to become the area that’s going to help sustain the business here?” a standard problem. The Michael J. Hawthorne file Some of the sites we have, say in Texas, we have a lot JOB: President, New York Air Brake. NNYB: That said, what has kept New York Air Brake of technology there. We ultimately want to be able to in Watertown for as long as it’s been, over 100 years? AGE: 44. flex demand into different locations, and that’s just to continue the growth purge. HAWTHORNE: I think some of it is tradition; momen- FAMILY: Wife, Kimberlee, cosmetologist; son, tum keeps things where they are, unless you find rea- Thomas, 20, a junior at the State University at Buf- NNYB: Any frustrations or things that you feel New 9 falo studying accounting; daughter, Christen, 18, sons to move them. If I look at what we’re really good York could do to improve, with respect to fostering at, our expertise, we built up a capability in Watertown a nursing student at Le Moyne College, Syracuse. more job creation? for manufacturing, again in credit to the labor force HOMETOWN: Harrisville native. HAWTHORNE: The tax structure is a little bit difficult. for being as good as they are. Our engineers have EDUCATION: Bachelor’s degree, Clarkson 7If we had a better tax structure, we’d be able to con- understood the historic part well, and that’s not some- vince more investment.
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