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Executive Interview With Eric Sills, Incoming CEO Of SMP

Counterman’s sister publication, aftermarketNews, recently sat down with Eric Sills, current president and incoming CEO of Standard Motor Products (SMP). Sills tells us about this transition, as well as SMP’s plans for growth in the future.

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In today’s AMN Executive Interview, we sit down with Eric Sills, current president and incoming CEO of Standard Motor Products(SMP) later this month. Sills tells us about this transition, as well as SMP’s plans for growth in the future.

This past fall, it was announced that your father, Larry Sills, would retire from his post as CEO of Standard Motor Products with you succeeding him in the role, while he continues as executive chairman. You are set to officially take over as CEO on March 31. What is first on your agenda in this new role?

To be frank, the first thing on my agenda is to continue to do what we have always done. I believe one thing that makes SMP a unique and special company is our stability. We are coming up on our 100th birthday (we were founded in 1919), and I am only the fourth CEO. Throughout this time, we have been consistent not only in our management, but in our strategy – being the best full-line, full-service supplier of premium aftermarket lines.

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Your father is a veteran of this industry and highly regarded both for his charm and his business savvy. What words of wisdom did he offer as he prepares to pass the torch?

While there was no “passing of the torch” discussion per se, he has taught me a great deal over the years. He is my most influential mentor.

There are many key principles he lives by, and that I believe I have adopted. These are the main ones:

  • Always take the long view. While we are a public company and certainly must be aware of our shareholders’ needs, we are always going to focus on decisions that are the right thing in the long run, and not for the quarterly earnings.
  • Take care of our people. I believe we have a very loyal group of people and a great deal of that is because we treat everyone with respect. Our people feel a part of the family, and that is something we will always try to maintain.
  • Always take the high road, even if it is painful in the short run. Never take a shortcut, never cut corners. Always do what’s right.

You’ve been with SMP since 1991, working in various parts of the business all over the globe. Having done so, what do you see as SMP’s biggest strengths, and what will be the company’s greatest challenges in the coming years?

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I believe our biggest strength lies in having the strongest overall program. We provide all the necessary elements to help our channel partners secure the professional installer business, from our technician training to our strong field sales force, from our supply chain expertise to our strengths in marketing and catalog content, and by having full-line coverage (we have over 50,000 SKUs) so our customers never have to say no to a sale.

It is predicted that the majority of the growth in the aftermarket will be in the DIFM segment, and that is great news for our business model. We believe these customers want more than just a part in a box.

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As for challenges, there are many, from new low-cost entrants of short lines with no services, to ever more complex automotive technology. But I am confident we’ll navigate the changes as we have for the last century.

We’ve seen major consolidation within both the distribution and supplier segments in the past decade – the most recent being Dana’s acquisition of Magnum Gaskets. In your opinion, what does the next decade look like for the automotive aftermarket?

While we have certainly seen consolidation at all levels, we have also seen new entrants. I think the industry will continue to evolve. I will say that the pace of change is definitely accelerating – we’ll all need to be more nimble.

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What can you tell us about SMP’s growth plans? Any acquisitions or expansions on the horizon?

Beyond the everyday effort of duking it out in the trenches for market share in existing product categories, SMP is committed to pursuing growth into new areas by seeking logical product extensions. Frankly, there is nothing new here – we are always evolving with automotive technology, and taking advantage of new types of systems that we believe fit the broader definition of Engine Management or Temperature Control. Some recent examples of this is what we have done with diesel and with Tire Pressure Monitoring Systems (TPMS). We are also very pleased with how our TechSmart program is growing. And while some of the newer technologies may seem daunting, we truly believe they present a great opportunity and therefore we are investing in them.

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While much of our growth has been achieved organically through our own product development efforts, we have always had a major push for growth through acquisitions. We have closed eight deals in the last few years and are always seeking new opportunities. We are very selective with these – we will only acquire businesses that are truly complementary and synergistic. These therefore tend to be one of two types. They are either what we call bolt-ons, where we acquire a competitor, thereby strengthening our position in the marketplace and gaining improved economies of scale, or they are vertical integration deals, where we acquire a supplier – delivering growth, but also providing a shortcut to being a basic manufacturer with all the benefits that brings such as better control over quality, cost and the supply chain.

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