Former S&S Cycle Chief Brett Smith Joins Baja Motorsports

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Brett Smith, former president of S&S Cycle, one of the leading names in American v-twin motorcycles, has been named head of Baja Motorsports' U.S. operations. Smith currently is traveling in China where he is visiting Baja factories and component suppliers.

I’ll be providing more information on this major move when Smith returns to the U.S. and gets settled into his new position. In the meantime, here is information on Smith and Baja in a Q&A session that I developed with Smith.

Baja Motorsports is based in Tempe, Ariz., where it operates a 70,000 sq. ft. parts, service and warehouse/office facility. It sells Chinese-made powersports equipment primarily through big box retailers such as Pep Boys. Service is provided through a network of some 1,000 independent service shops in North America.

Baja was launched in 2004 by Richard Godfrey, president and CEO, Jennifer Andrew, vice president of operations/CFO, and Ryan Daugherty, vice president of sales and marketing. In the first year, Baja posted sales of $6.5 million.

The next year the partners sold a 30% share of Baja to Techtronic Industries, Inc. (TTI) and recorded sales of nearly $70 million. TTI, based in Hong Kong, owns a portfolio of consumer products that includes Milwaukee, AEG and Ryobi power tools and accessories, Stiletto hand tools, Ryobi and Homelite outdoor products, and Hoover, Dirt Devil and Vax floor care appliances. Its products are distributed through major home centers, and it posted sales of $US 3.4 billion in 2008.

In 2007, TTI upped its ownership to 75% of Baja, and Andrew cashed out her investment and left the company. Daugherty left the next year, and Godfrey left in 2009.

Smith served as president at S&S, the Viola, Wis., an internationally-recognized developer of V-twin engines and performance parts, for six and a half years before resigning in December 2008. Smith is the son of George Smith and grandson of S&S founders George and Marge Smith.

During his tenure at S&S, Smith assisted with the formation of the American V-twin Aftermarket Committee of the Motorcycle Industry Council (MIC), helped establish EPA and CARB certified engine programs and served as an advocate for the V-twin industry internationally. He was also instrumental in the development and release of the 50-state 2010 emissions compliant S&S X-Wedge engine.

Smith is a graduate of West Point and holds an MBA from the University of Chicago. Currently, Smith and his wife own a Living Word Parable Christian Store franchise serving southwest Wisconsin. The store offers books, gifts, inspirational and sympathy cards, jewelry, music, videos, and apparel—along with church supplies and curriculum; it also sponsors/facilitates guest speakers, seminars, and holy pilgrimage trips.

Here is an edited version of my email “conversations” with Smith, edited for brevity and clarity, as he traveled in China this week.

Dealernews: How did i you take the job with Baja?

Smith: I started looking for something in November, 2009, after having taken a break for a bit. Prior to that, my wife, Robin, and I worked hard on getting the Christian bookstore up and running. That’s doing well and is managed by a team of employees in Wisconsin. I saw an ad for this position listed by Lonski & Associates, so I called Henry and got an interview with Baja.

DN: When did you join Baja?

Smith: I was officially hired on Jan. 11, 2010, and that was my first day on the job.

DN: How do you like working with a Hong Kong-based operation?

Smith: Since I’m pretty new to Baja, I haven’t had the opportunity to work with the Hong Kong team yet.

DN: What did you learn on the custom V-twin side that applies to running a Chinese importer?

Smith: The most important take-away is managerial leadership and organizational structure in any organization. What I specifically learned that applies here is that we must work hard to overcome the continued erosion of the rider demographic in the powersports industry.

Baja has a very important role to fill in that regard and I am working on developing a strategic plan that will allow us to be a leader in providing reliable, value-based powersports products with world-class customer service. And yes, I realize that we have some work to do in that regard.

DN: What is your title and primary responsibility?

Smith: I am the general manager of Baja and am responsible for all aspects of the business while reporting to the board of directors.

DN: What’s the difference between your position at Baja and the one you held at S&S?

Smith: The board I am reporting to is not predominantly my family, and Baja is a business unit within a multi-national conglomerate with many resources.

DN: Are you the top guy in Baja’s U.S. operation?

Smith: Yes, but we will be expanding our markets well beyond North America over time and there are no other “counterparts” overseeing other geographic markets for Baja. So, I guess that makes me the top guy period—after the board of course.

DN: There has been a lot of turmoil at Baja during the last year or so: a down powersports market, the CPSC ban on kid’s quads which hurt sales, the bankruptcy of a major big box customer, officers departing, TTI lawsuits against former employees, significant customer dissatisfaction over products and service. What are your biggest challenges for 2010 and how will you solve them?

Smith: I’m still pretty new to this, but here are the issues as I see them: Secure our vendor base, grow our industry relations, develop our own proprietary products, and improve our customer service.

DN: Let’s take them one at a time. What are you doing with your vendor base?

Smith: We must secure our vendor base and ensure that all of the products we have manufactured are compliant with all regulatory standards. Baja has faced some challenges in this area, but we have some very talented people that were hired along with me to address this situation very quickly.

DN: Who else was hired?

Smith: Baja hired Luc de Gaspe Beaubien, a former Bombardier executive and attorney specializing in compliance issues that include the EPA, CARB, and ANSI standards. Luc will report to me as the vice president-product development/compliance. I think you know my track record on compliance and my desire to operate within the letter of the law; Luc’s presence will further solidify that approach at Baja.

DN: How will you work within the powersports industry?

Smith: I was actively involved in the MIC and worked to cooperate with both the EPA and CARB on many projects and on many levels. With Baja, it will be the same—they joined the MIC and Specialty Vehicle Institute of America (SVIA) shortly before I came on board. We’ll also be working with U.S. Customs and the Chinese government.

I think my past experience at S&S will enable me to assist Baja in forging positive relationships with these organizations—some of which have been strained over the past several years.

DN: What will Baja do in terms of new product development?

Smith: Baja will become a developer of unique products with our own intellectual property. We will continue to leverage the TTI vendor relationships in the Far East, and we will also make use of the many developmental resources within the TTI corporate family.

DN: What resources are those?

Smith: Baja, as you know, is completely separate from TTI, North America. But as a subsidiary of TTI, Hong Kong, which also owns TTI, North America, we will be able to source services from TTI entities on a fee basis. This will allow us to act quickly and bring greater force to the market than our competitors.

BOTTOM LINE: Baja will rapidly grow beyond a reputation of being an “importer” to that of an “innovator” of reliable, value-based powersports products.

Our goal is to lead the industry from a price-to-value perspective—something I believe the enthusiasts in our industry will very much appreciate.

Furthermore, the major OEMs will most likely welcome this as our product line will continue to fill the pipeline with a generation of new powersports enthusiasts who will eventually grow into “higher-end” or “top-tier” products that Baja does not produce.

DN: Does Baja have any competitive advantages in developing new products?

Smith: We have extremely low overhead and we have an ability to leverage a TTI vendor base that is world class. We also have the ability to offer a line of products that is attractive to the portfolio of big box retailers that TTI already has strong distribution relationships with today. Who else has those resources at their immediate disposal?

DN: Service seems to be a growing problem for Baja, based upon the number of consumer complaints that I receive. How will you fix this problem?

Smith: Service is a major and immediate issue for Baja. But first we have to close the loop in the first three items I’ve mentioned. As you secure your supplier base, meet regulatory standards, and take ownership for the development of your product line, the warranty issues will rapidly decline.

Furthermore, Baja has had a history of using multiple vendors for the same SKU and/or spare parts inventory. It is difficult to manage consistency and quality when you use that approach. I am in the Far East today working on this very issue among other vendor-related initiatives.

DN: Will you make changes in Baja’s the service network?

Smith: In addition to working with component suppliers, we will aggressively pursue a dealer development program similar to the one I initiated at S&S Cycle. It is imperative that we have a network of dealers that can support and service the end-users and our big box retailers alike. Dealers make good money in servicing vehicles and we believe we can add volume to their operations—particularly the much beleaguered independent dealer network.

DN: Anything else?

Smith: I’m excited to be a part of this company, and my wife, children and I are all happy to be back in the Southeast—I was stationed at Fort Bragg for five years—and I think Baja will be very successful in short order.

DN: What are you working on now, in addition to meeting with vendors?

Smith: My schedule right now is hectic as I’m working to 1) develop our strategic plan and the tactical implementation of that plan; 2) build a team that can and will win; 3) manage both the Phoenix, AZ, and Anderson, SC, resources of Baja while coordinating our vendor base in the Far East; and 4) moving my family.

I haven’t even gotten back home yet and already we have our next two trips scheduled between now and the end of April—as well as several very important customer visits throughout North America. I think the rest I took after leaving S&S has given me the energy to take this on with full force. We—the Baja team—are very focused and have a great deal of enthusiasm and energy for what we must accomplish and we will have a lot of fun doing it.