"The downturn from 2008 to 2010 was more severe than anything we'd seen in decades," says Wabash President Dick Giromini. "If you look specifically at dry vans, you have to go back to 1963 to see volumes as low as that, and from an overall trailer business, back to 1975." Listen
Giromini says the company responded with "dramatic actions," including significant layoffs. Just three years later, however, Giromini says the company is now experiencing "positive momentum" as pent up demand for new trailers drives business; net income for 2011 was $15 million, compared to a loss of $141.8 million in 2010.
"Our customers are having to pay the piper," says Giromini. "The equipment gets so aged—there are challenges with uptime and reliability of the equipment. Now that we're past this three-year downturn well below normal replacement levels, it's time for the customers to step up; they've got to upgrade and refresh their fleets."
Wabash leaders believe they now have the perfect setting to not only retain current customers but attract new business with the recently completed Ehrlich Innovation Center at its Lafayette headquarters, named after Rod Ehrlich, who helped author more than 50 patents at Wabash National. The facility provides an indoor area to showcase the company's products, including 53-foot trailers, and also highlights Wabash's contributions to advancing the industry. Listen
"We can display some of these things, like the very first trailer we ever built back in 1985, which was a hand-built trailer for Sears Roebuck," says Ehrlich. "Some of the innovative products we brought out we take for granted today, because they've been standard components in the industry now for several years—but we forget we created them in the beginning." Listen
Giromini says customers will also be able to see and experience products they may be less familiar with as the manufacturer diversifies its business. While most may relate the company to the standard "box on wheels" seen on interstates, Wabash is moving into other sectors of the transportation and storage industries. Listen
About one year ago, it announced a new product line with the manufacturing of frac tanks, which are mobile steel storage tanks to hold liquids at oil and gas drilling sights. Most recently, the company launched a line of vacuum tank trailers, which are cylindrical trailers that haul non-hazardous material for the oil and gas industry.
"The big 53-foot semi-trailers we joke with people about getting stuck behind on the highway—that's what moves America; that will always be our core," says Giromini. "What we're trying to do is diversify and leverage our physical and intellectual assets into other markets. It gives us better balance in our business, so the next time another 2009 occurs—the next time lightning strikes—we're much better prepared to handle it."
The strategy appears to be working; the latest earnings report shows external net sales for Wabash's Diversified Products segment increased nearly two-fold from the previous year.
Company leaders say many of its new products come from simply solving problems for customers and exploring how new materials introduced to the industry could be used in current products. Listen
"I've been in the industry for 50 years, and the rate of change today is more than what the rate of change was when I started—and I see it continuing to be more complex," says Ehrlich. "We've got more things on the burner right now to be introduced than what we've ever had. The innovation and the opportunity to innovate will never stop."
Now equipped with a facility to showcase its past successes and highlight new endeavors, Wabash National leaders believe the company has survived a significant bump in the road—and that it helped the truck trailer maker grow into a stronger and more diversified business.