Johnson developed his forward-looking position on the global economy during his tenure at GM, where he has served as a director of Investor Relations, a director for GM Europe's Truck & Van Vehicle Line Executive team, director of Service and Parts Operations — New Ventures and Latin America, Africa and Middle East (LAAM) Regional Aftersales director. In his current position, Johnson has global responsibility for GM's Independent Aftermarket (IAM) efforts across the U.S. and Europe, Asia-Pacific, and Latin America, Africa and Middle East regions. Johnson holds a bachelor's degree in aeronautical engineering from Purdue University and a master's degree in business administration from the University of Michigan.

Although Johnson describes the nation's economic climate as "uncertain," he suggests that aftermarket players turn their more difficult challenges into opportunities by investing in new technologies and service methods that will position them to participate in the future of automotive transportation. In Johnson's view, there's always room for top suppliers in the aftermarket supply chain, a position ACDelco vigorously maintains through training, cutting-edge technologies and the continued innovation of quality, branded products recognized around the world.

In this exclusive interview with Aftermarket Business magazine, Johnson delves into the aforementioned issues, while also considering the effects consolidation, telematics and high gas prices have on the aftermarket industry, as well as the end consumer who trusts the ACDelco brand and continues to buy these branded products for his or her car. But, in the end, he brings it back to the beginning — to technology, stressing the importance of the latest and greatest innovations that make driving today's vehicles more efficient, safe and fun.

Please visit our Web site for an even more in-depth look at Johnson's interview.

Q: A recent Global Symposium speaker said we are not in a recession, rather, we're facing a "soft" economy. What do you think, and how is ACDelco positioned to deal with a recession — or a soft economy?

I think "soft economy" is a good way to describe the current U.S. situation. While we might not technically be in a recession as defined by economic indicators, consumer confidence is down and that's what we are concerned with — after all, it's ultimately the end consumer who keeps us in business.

The U.S. automotive aftermarket is quite large and continues to grow, albeit modestly.

We have to continue to deliver high quality and value to maintain our leadership position. This year has been challenging, but we think ACDelco is well positioned to weather the storm. We're offering new incentives to our U.S. Warehouse Distributors to help grow our mutual business. We are increasing our digital marketing efforts to capitalize on the increasing number of households using the Internet to search for automotive parts and service. And we are continuing to leverage our global size and scope to provide the best products for our customers.

Q: Being involved with both distribution and service, where in the chain is the economy being hit the hardest? And how is your company adjusting to these challenges (if any)?

In the U.S. and Canada, there are approximately 8,000 service centers that participate in ACDelco's Total Service Support (TSS) program, but these are independent businesses. Their owners have to deal with the brunt of uncertain economic conditions at that level.

Really, we're seeing the impact in both spaces. There are a few more open service bays than our installer customers would prefer to see. It's probably true that some retail customers are simply deferring service, especially for non-essential items. In addition, some installers are likely taking in business they would have turned away before. Our distributors are keeping a careful eye on their inventories and receivables to be sure their businesses stay healthy and prepared for the pending recovery.

Q: In your opinion, are there any fundamental changes going on in the distribution chain that will alter how business is done at the distributor level? The service provider level? The manufacturer level? Please explain.

We are seeing the continued consolidation of jobbers that began over a decade ago. We've even seen this consolidation with some of our own ACDelco Warehouse Distributors (WDs) as they work to take advantage of some of the inherent distribution efficiencies of scale.

Another change is that many jobbers are opting to participate in program buying groups to take advantage of quantity purchase discounts and other unique services for their businesses, rather than negotiating on their own.

The last important change is the growth of the automotive retailers like Advance, O'Reilly and AutoZone. They are opening more retail locations, buying others and getting more aggressive with the commercial side of the business. Today, many independent service centers look to the retailers as well as the WDs and jobbers for their parts requirements. In general, retailers have longer hours, are open on the weekends and are centrally located. So, while it might take time, I think we will see a continuing shift in their mix toward more Do-It-For-Me customers.

Q: What is the biggest obstacle the industry must overcome? And what's the biggest opportunity?

"Uncertainty" probably best sums up the biggest obstacle our industry is facing right now. The entire supply chain is impacted by uncertain economic conditions, fuel prices and consumer confidence — people are skittish and are worried about taking any action that is long-term and/or requires an investment.

While we can't fix the situation single-handedly, we can turn these challenging times into opportunities. Those who pull through and succeed will be the ones who offer value and have a strong brand; ACDelco does both these things.

For consumers, routine maintenance always has been important; it is even more so now if they are delaying the purchase of a new vehicle. We have to drive home the point that spending a little bit of money now can save them a lot down the road. For distributors and installers, we must continue to give them a reason to do business with ACDelco so they recommend ACDelco to their customers. Essentially, we need to continue to deliver consistent quality and service over an extended period of time to provide solid support for our customers' decision to sell and install our products.

The latest trade tracking study — conducted by an independent research company — shows we're doing just that. According to the results, the ACDelco brand continues to maintain positional superiority in the eyes of independent service centers (ISCs) when it comes to offering high quality, high standards and dependable parts. Our biggest opportunity is not just about sustaining this performance but also growing our business.

Looking ahead, I see more opportunity for our industry in the form of advanced propulsion systems and the complexities associated with repairing and maintain them. Over the next few years, we will probably see more powertrain diversity pulling into service bays around the country than since the very beginnings of our industry: six-speed transmissions, diesels, advanced electronics for gasoline engines, hybrids, and, soon, extended–range electric vehicles.

Over time, these changes will bring new technologies and new service methods to the independent aftermarket and we will have to adjust accordingly. Those who embrace them, through training, staying current on technology and relying on top-quality suppliers will, in my view, be well positioned to participate in the future world of U.S. automotive transportation.

Q: Two of the industry's leading associations have recently offered comprehensive reports on telematics. What effect will it have on the industry, i.e., who will benefit and who will not?

I haven't yet seen the reports specifically, so I can't comment on them, but I can say telematics make the automotive industry exciting. ACDelco probably has a different way of looking at this question because General Motors is our parent company. OnStar by GM, the industry's leading telematics provider, affords us the opportunity to leverage learnings from this technology and how it fits into the aftermarket service environment, something others in our industry are not fortunate enough to have.

The ability to send, receive and store information via telecommunication devices can benefit just about everyone by providing instant response and enabling the transfer of data — things that in the past were not possible.

I recognize some might be reticent to adopt this new technology; additionally, there are privacy concerns that must be addressed. However, used properly, telematics can be a very valuable asset and increase business opportunities and efficiency, ultimately at the installer level (which, in turn, translates into increased parts sales and service support for ACDelco).

Q: In addition, how is ACDelco preparing its technician network for telematics?

ACDelco training includes TechAssists — 10- to 20-minute technical training sessions technicians can take online — and we currently offer one on OnStar.

Just last year, we added a seminar to our curriculum called "Programming for the Aftermarket." It addresses one of the hottest topics in the automotive aftermarket —service programming. Telematics, defined as communication between systems and devices, have been available in vehicle diagnostics for some time. Today, there can be over 20 programmable computers on one vehicle and the seminar shows how to access multiple manufacturers' Web sites to pull programming information down from them, as well as update the various computers on a car. It also covers MDI — multiple diagnostic interface — where the service shop can set up a wireless network to communicate with the vehicle through MDI: "no strings attached."

At ACDelco, we continually assess our offerings, adding new courses so shop owners and technicians can be on the cutting edge of new technologies.

Q: What impact are fuel prices having on ACDelco and how is the company coping? What's the impact on the overall aftermarket? Gas is $10 a gallon in France — do you have any concerns that we will catch up with the French?

Higher fuel prices impact everyone in the supply chain, from our distributors transporting parts to service centers/installers, to those same service centers/installers seeing a decline in business due to some consumers driving less and/or opting to forego routine vehicle maintenance. These actions impact ACDelco's business; we're also challenged by a decline in new vehicle sales which ultimately will mean fewer replacement parts needed in the future.

Internally, we are taking several actions to combat increased prices. An added benefit of a large-order volume enhancement process for ship direct we launched last year is that the number of shipments are reduced, thereby reducing fuel costs. And last month, we just concluded a 'Fill It Up' promotion that offered all Warehouse Distributor and Alliance Jobber Program sales people the opportunity to earn up to $500 on a gas card for selling ACDelco parts.

I won't speculate about the ultimate price of gas; if I were able to do that, I would be trading oil futures. I do believe, however, that we are seeing a systemic change here, not a cyclical one. Consumers will increasingly demand more fuel-efficient vehicles and the OEs will respond. They already have — for example, GM continues to offer more vehicles with a 30-mpg or better highway fuel economy rating than any competitor, with additional introductions planned.

Our economy is built on mobility, and I do not see that slowing down anytime soon. Instead, as we have in the past, U.S. transportation will adapt to the new reality of more expensive oil. We in the independent aftermarket will have to do this as well. I for one think ACDelco is well-poised for that future.

Q: GM, along with the other OEMs, is faced with some real challenges this year, most notable being declining sales in the highly lucrative truck and SUV market. How will this challenge affect ACDelco?

Along with the rest of GM, we at ACDelco are focused on controlling costs and improving efficiency. Unlike some of our competitors, however, we are able to leverage our global size to constantly identify and implement best practices.

Also, emerging markets and developing countries present tremendous growth opportunities for us, and we are pursuing growth abroad, in addition to in the U.S. For example, what we call the Latin America/Africa/Middle East (LAAM) region has seen approximately 20 percent annual growth for ACDelco for the last three years, and the European region has seen approximately 25 percent. We want to continue this.

Q: Is there, in your opinion, more of a focus on product prices these days? If so, what are the difficulties in remaining competitive in this environment?

Indeed, given current economic conditions, companies and consumers are scrutinizing all costs these days, product prices included. Businesses are struggling to not have to pass increases along to consumers, yet with revenues declining because consumers are cutting back on purchases, they often have no choice but to either charge additional fees or raise product prices. It's tough.

Again, that's why it's so important to not only have a strong brand but also to offer high-quality products. Anyone can offer a less-expensive product — which looks attractive when you're trying to cut costs — but if it's not high quality, it will end up being more expensive in the long run because of customer comebacks, dissatisfaction and returns.

Q: ACDelco is heavily involved in industry training, and your company has endorsed a "blended learning" approach to training, which supplements classroom time with Web-based courses. Has this style of training been successful? Why or why not?

Yes, the success has almost been better than we originally anticipated. Since we launched "blended learning" in January 2006, the number of courses taken has increased exponentially. In 2006, Total Service Support (TSS) participant personnel alone completed over 18,000 courses through the ACDelco Learning Management System, or LMS, the catalyst for both Web-based and instructor-led training classes and seminars. In 2007, the number of course completions grew to over 23,000; we're seeing great response so far in 2008, where we are on pace to have nearly 30,000 course completions by TSS participants this year.

"Blended learning" has been so successful because it offers not just technicians, but shop owners flexibility. Technicians can log on during down time at the shop, during their lunch hour or even from home — basically, anywhere you can access the Internet, you can take one of our classes. For shop owners, it enables them to have technicians who are up-to-date with the latest technologies but who don't have to take a few days away from their job to get trained. It's a real win-win for everyone involved.

And, because we're constantly adding new features, content, and accessibility to our training portfolio, we keep current technicians coming back for more, and get new technicians involved. Most recently, we launched the ACDelco Future Technician Training Program. For the first time ever, a portion of our award-winning technical, Web-based training that professional technicians use is now available to high-school-level students (14 years or older) at National Automotive Technicians Education Foundation (NATEF) certified schools nationwide at no cost. I encourage your readers to visit acdelcotechconnect.com and click on the "Future Tech Training Program" link in the "What's New" column for more information.

Q: What new ACDelco products (or types of products) can the industry expect in the near future? Down the road a few years? When do we reach technological burnout?

For competitive reasons, I obviously can't give you specifics about our portfolio. What I can tell you is that the increasing number of advanced propulsion vehicles on the road today — and the increasing number expected in the next few years — is generating some opportunities for us. So, please stay tuned.

As for reaching technological burnout, my answer is 'never.' Automakers won't stop equipping vehicles with new technologies until consumers quit demanding them. If a technology makes a vehicle safer, more efficient, more convenient, better looking or simply more fun — somebody will introduce it.

And if that advanced technology needs maintenance, we want ACDelco to be there to support it, too.