Oct. 16, 2006 – After the transformation
October 16, 2006
Filed under Features
YORBA LINDA, Calif. — With a dramatic transformation all but complete, White Brothers is seeking to enhance its reputation as a high-end manufacturer by diversifying its product line and making a marketing push into amateur racing.
The Yorba Linda, Calif., company, known for its off-road products and ATV exhausts, underwent a significant change last year when it went from being primarily a distributor to mainly a manufacturer.
Before making the switch in late 2005, White Brothers was among the top five distributors in the nation and among the top three in Southern California, according to company officials’ estimates.
As a distributor, White Brothers had two warehouses, the existing facility in Yorba Linda, which is located near Los Angeles, and one in Louisville, Ky.
“Even with two locations, going against the PUs and the Tuckers is tough, very tough,” Tony Bono, White Brothers’ vice president said in an interview with Powersports Business. Parts Unlimited and Tucker Rocky “have a cookie cutter facility. If they want to build another facility, they have the blueprints, they have the systems, they have the processes already down pat. They buy the land and, boom!, there it is and they’re in business.
“They were able to go deeper on their discounts as opposed to what we could. Our volume suffered and when we tried to step up to the plate, the bottom line is our margin suffered. It just continued to get squeezed and squeezed.”
The stiff competition wasn’t the only reason for the dramatic change. White Brothers officials said they wanted to concentrate on they own brand. So the company closed its Louisville facility in 2005 and later that year notified its vendors that the company would be making the switch to being primarily a manufacturer.
“Obviously there was a lot of planning prior to that, a lot of soul searching as far as the holding company goes,” Bono said. The company, which was founded by Tom White in 1975, is owned by Motorcycle Aftermarket Group (MAG), which also owns a number of other powersports manufacturing companies, including Renthal, Progressive Suspension, Vance & Hines and Kuryakyn.
To make the change, White Brothers not only gave up most of its sales — distribution made up about three-quarters of the company’s revenue — but also cut its workforce of approximately 120 employees in half.
Today, the company is slowly building back up as it continues to transform its warehouse from a distributing facility into a manufacturing area. Thanks to a sizeable capital budget increase, the company is continuing to bring in machining equipment to broaden its product line.
“Up to last year, the majority of everything we did in house was basically take all the components and glue them together,” Bono said. “We did no machining in house.”
That’s changed now as the company has considerably increased its product line.
“And that’s just going to get bigger and bigger,” Bono said.
To help that growth, White Brothers is investing heavily on marketing.
“It’s what going to drive us,” Bono said of the company’s marketing, which has changed from, “We have everything, come buy it” to “we have these things, they’re great, they produce great horsepower, it’s a great product. Come and get it.”
“It’s a big swing from what we were,” Bono said.
The marketing push will focus heavily on amateur racing. That emphasis will be an addition to the relationship White Brothers has with Factory Yamaha as its official four-stroke exhaust developer and supplier.
White Brothers purchased a race-support vehicle that will attend all of the big amateur motocross events, including the Loretta Lynn AMA National Championships. The company has attended the motocross events before, but the support vehicle and the company’s decision to field its own amateur team will give it a much larger presence.
“Once you start attending the races,” Bono said, “you can see the volume of people that will attend these races, especially the big qualifiers.”
White Brothers officials point to the addition of Tom Morgan, formerly with Team Kawasaki, as one of the reasons why they’re investing in the amateur arena. Morgan, who joined White Brothers as its director of engine development, helped Kawasaki win a number of supercross and motocross championships.
Besides giving White Brothers a name in the motocross arena, Morgan will build performance engine packages for beginners to professional racers that will be available for dealers to sell.
Besides motocross racing, White Brothers will look to expand its international sales.
“It’s a market that we just dabbled in slightly at this point in time,” Bono said.
The company does sell in the United Kingdom, parts of Europe and Australia, but they’re looking to expand, perhaps into South Africa and into some former Eastern Bloc countries.
Bono, who has a background in high-volume manufacturing, said White Brothers could easily increase production to meet additional demand that increased international sales could bring.
Increased international sales, developing a new catalog and additional marketing in amateur motocross are all on White Brothers’ immediate to-do list.
“If we are able to successfully pilot our amateur team, get it out to all the races, start building the relationships with people at the ground level and start seeing our brand take off, that would have been a very successful six months,” Bono said.