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CandidConversation A. O. Smith executives —
‘Innovation is in our DNA’ B
BY MARY JO MARTIN Editorial director
y all accounts, 2010 was quite a year for A. O. Smith Water Products Company.
During the course of the year, the
company launched an incredible number of products in both the res- idential and commercial categories, as well as models utilizing emerging technologies. In May, after a flood surged through the plant — and many employees’ homes — leaving a wake of devastation behind, the entire organization pulled together to ensure virtually uninterrupted service to customers. And just a month later, A. O. Smith announced that they had formed a joint venture with renowned tankless manufac- turer Takagi, a move designed to further strengthen and expand their water heating offerings. Recently, editorial director Mary
Jo Martin visited the company’s headquarters in Ashland City, Tenn., for a candid conversation with four key executives at A. O. Smith about the past, present and future of this venerable company. She also took a walking tour of the 1.5-million- square-foot facility to see just how they had rebounded since the flood, and watch the care its workers put into building each product. The following is her interview
with CEO and president Ajita Ra- jendra, VP-marketing & strategic planning Mike Parker, senior VP- wholesale sales Jim Margoni, and VP- emerging technology and mar- ket development Dave Warren. MJM: For those who may not be
aware, let’s start out with some background first to set the stage.
•THE WHOLESALER® — MARCH 2011
Signage in the newly refurbished lobby at A. O. Smith Water Products headquarters in Ashland City, Tenn.
What do you believe has been at the core of the reputation and success A. O. Smith has achieved? Rajendra: A. O. Smith has al-
ways had a reputation for innova- tion. It started when the Smith brothers opened a machine shop in Milwaukee in the late 1800s. They made structures out of steel tubes, and soon discovered they could cre- ate greater strength by welding the tubes together. They started with things like baby carriages and bicy- cles, and eventually began making auto frames. Automaker Henry Ford approached them about doing busi- ness together, but he needed them to increase production more than 100 fold in just three months. Thanks to
their ingenuity, they were able to ac- complish that, and became Ford’s primary supplier of auto frames. Next, the company developed the
process of coating steel with glass — which led A. O. Smith to enter the water heater industry. We also developed a process for lining steel that enabled cost-effective trans- portation of natural gas and oil, which led to getting low-cost oil, gas and water to every home. Innovation is in the DNA of this
company. It is in our culture to in- vest in innovation and be the best with whatever we touch so we can make a significant impact on this in- dustry. MJM: Why has it been so impor-
tant to you to keep a number of plants here in the U.S. at a time when many companies have moved the majority of their operations overseas? Rajendra:We want to create and
keep as many jobs in this country as possible. Even after the flood, we thought it was very important to bring back jobs here. Economically speaking, water heaters are big and bulky so transportation can be costly. In that respect, it is cost-ef- fective to produce them domesti- cally, and of course Ashland City is very centrally located for shipping product anywhere in the U.S. Margoni: It’s also a source of
(Turn to Strengths... page 146.)
Dave Warren Ajita Rajendra CEO and president Mike Parker VP-marketing & strategic planning • Be sure to visit
www.thewholesaler.com for web exclusive articles and videos! • Jim Margoni senior VP-wholesale sales
VP- emerging technology and market development
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