Delco Remy America (DRA), the privately held company spun off nearly a year ago from the Delco Remy Div. ofCorp., is alive, on track and operating among other places in Budapest, Hungary.
DRA is headed by Chairman Harold K. Sperlich, one-timeMotor Co. senior executive and president of Corp.'s automotive operations, who, for the first time, finds his own money on the line.
"(It's) totally different," Mr. Sperlich says. "That's what's exciting about it. As far as the car business is concerned, I've kinda been there, done that.
"But, I'd never been an entrepreneur. I've never been the head of a business, a part-owner of a business as well as being a part of the management team," he says. "It fuels your juices."
Mr. Sperlich got himself into entrepreneurship because he tried retirement and thought it was boring. "I was looking for an opportunity to be personally involved, not only from an investment standpoint but to give my life a little sense of direction," he explains.
He says he and a friend -- Erwin H. (Bill) Billig, vice chairman of the board of MascoTech -- decided jointly to look for some investment opportunities.
They and about eight other groups -- including Citibank Corp. -- were interested in the Delco Remy businesses available. "We needed money. Citibank needed management," Mr. Sperlich recalls. "So we got together and decided to undertake this opportunity as a team. They are our principal financial backers."
The main pieces of DRA's ownership include CitiCorp Venture Capital, MascoTech (a component supplier), and a number of management employees including Mr. Sperlich.
DRA is comprised of four businesses in four divisions selling to about 250 companies worldwide, says Mr. Sperlich. One is the heavy-duty alternator and starter business, which supplies heavy-duty and diesel engine manufacturers. "If you see a Class 7 or 8 on the road, you can bet money, and win it, that our equipment is on it," Mr. Sperlich says.
The second business supplies GM all of its car and truck starting motors. Powdered metal forge products such as bearing races and engine rods comprise the third business. "While it's not a large business, it is very fast-growing business," says the chairman.
The fourth DRA segment is the heavy- and light-duty rotary electric product aftermarket. "It's a significant business," says Mr. Sperlich.
Mr. Sperlich says DRA's revenue stream is roughly one-third GM, a third heavy-duty and a third aftermarket. At the moment, the company is concentrated in North America with 2,300 employees in four plants in Indiana and Mississippi. Headquarters is in Anderson, IN, where a new R&D center is under construction as part of a $50-million-plus capital program.
Like most other suppliers, DRA is in the process of going global. A recent acquisition of a 500-employee operation in Hungary will build heavy-duty electrical systems. "That gives us a good base in Europe to follow our North American customers, like Caterpillar, who are selling into Europe," Mr. Sperlich says. The Hungarian firm, Autovil, was a state-owned starter and generator manufacturing company headquartered in Budapest.
Putting his "you need all the friends you can get in life" philosophy into action, Mr. Sperlich says DRA will consummate a number of acquisitions and eventually joint ventures to expand the company's reach.
One example of that philosophy is a planned joint venture between DRA and SatCon Technology Corp. of Cambridge, MA, to apply SatCon's action motion-control technology to DRA's starters and alternators in the search for smaller, lighter, more powerful and reliable components.
Mr. Sperlich promises more, including a new yet-to-be-revealed "very important global customer."
He also says more than half to two-thirds of the company's product line will be redesigned over the next five years. "We have a very aggressive program to make sure that our product is the absolute best in the world."
Keeping the product up to date is vital to maintaining the success DRA is already enjoying. "We will be in the black this year, unless the market tanks," Mr. Sperlich says. "We've got a lot of work to do to become the company we envision. But we're tracking along that path and we're making progress."