Smoked 'em. Smoked 'em real good. Then turned around and smoked 'em again.
It was a simple test: A tech slaps a new set of high-end, competitive brake pads on a sport-utility vehicle. The visitor slowly exits the parking lot at the Performance Friction Corp. (PFC) rural headquarters/plant in Clover and angles the lumbering SUV out onto the two-lane and into the countryside. Look both ways. Quick glance in the rearview...no cop lurking behind a tree.
Nice and easy for, oh, three seconds. Then tromp on the gas and get that baby moving at 15, 20, 25 mph over the posted 50. Jam on the brakes and bring the hulking beast to a dead stop. No muss, no fuss. Do it again. Then again. By the third try the smoke's pouring out of the brake drums, that choking, tell-tale smell of cooked pads filling the cab. Brake fade's more than just a definite maybe. Even a couple of cows munching in a field are starting to look a bit perplexed.
Back to the garage. The grinning tech's ready to install another comparable set of pads-another competitor's brand. But wait... the scorched set on the SUV is glowing almost good enough to grill up a batch of huevos rancheros. Might as well knock off for lunch and let them cool down.
The second road test of a well-known premium brake brand produces almost identical results to the first. Roll down the windows and let in some fresh air. The pads are blistered. By now the cows aren't even looking up to see what all the smokin's about.
Shall we go for the trifecta?
After re-entry and cool down, a set of Performance Friction brakes are installed. Same test. Hardly the same results. Four or five "panic" stops...still no curious cops around. No brake fade, no smoke. Not even a whiff of overheated pads. The last stop's as quick and effortless as the first.
It may not be entirely scientific, but it's seat-of-the-pants, real-world experience. The kind any driver might encounter in stop-and-go city or freeway driving, a company exec says from the SUV's back seat.
Back in the garage the PFC tech nods. A quick examination of the pads. They hardly look different than when they exited the safety of their little box and were installed before the test.
The term "proven at the track" seems to hold a certain panache. Consumers see it plastered on promos for all kinds of automotive doodads from tires and brakes, to less-seen but just as crucial components like radiator hoses and spark plugs.
While the phrase may sometimes be overworked, it is the bedrock upon which PFC has tried to make its mark. Don Burgoon, PFC's president and its pied piper of quality, himself can wear that label. He did some racing from 1996-98, mostly F2000 and some stock cars.
"The reason I raced was to have first-hand experience, to know how our products performed-and I learned a ton," he told Tire Business during a visit to the company's Clover site. "The same thing that makes brakes good for a race car holds true for a car on the street."
That includes how the brakes interact with the vehicle and its many integrated systems, such as stability control.
Privately held PFC manufactures and markets non-riveted carbon metallic brake pads it claims run quieter, stop quicker and last longer than comparable brands on the market. Company executives are quick to tout independent tests confirming that assertion.
In addition to pads, the firm also makes on-highway rotors, off-highway pads and calipers and race products.
With a background of being a top supplier to racing venues such as NASCAR, the company has been mounting a push into the aftermarket, gearing a recently introduced installer program to independent auto service shops that rely on brake jobs among other menu board staples. The program supplies a shop with a popular range of pads for various applications, but more on that later.
First, a little history.
Brushing off with a wave and a laugh any questions about his age, Mr. Burgoon said he got his start in the automotive business in 1953 in Canton, Ohio. "My dad was a rebuilder, so I got a lot of experience working around cars. As a kid I riveted and de-riveted brake shoes, turned rotors, sold pads and brake shoes over the counter to installers and jobbers."
The small, fledgling company began with three employees, manufacturing disc pads for off-highway trucks and mining equipment, eventually plunging into the racing scene. "Racing's been very good to us-we've incubated a lot of products there," he said, noting the company's endeavors on the track-especially its advancements in rotor and caliper design-directly translates into its street products.
Mr. Burgoon, who's not been averse to cooking up a few brake pad material compounds over the years, succeeded his dad as head of the firm in 1978. He moved it to the Carolinas in 1986 and, in 1989, into its current 200,000-sq.-ft. Clover facility, less than an hour from Charlotte. The company oversees sales offices in North America, Japan and the United Kingdom and its more than 430 employees from that site.
Carbon metallic brake pads have been on the market since about 1987 and are, according to PFC Marketing Director Phil Gilsdorf, "the best of both worlds." Metallic provides better stopping power and carbon adds life with better wear and less noise.
Ceramic, on the other hand, is a "fancy name for an organic pad that contains clay filler materials," claimed Richard Adams, PFC's head of business planning. "They don't have the stopping power or the lifespan (of carbon metallics), but are quiet and don't smoke."
"If someone says, 'Our pads last longer,' the response is often, 'Yeah, but they eat up rotors,'" Mr. Gilsdorf continued. "But if you do it right back there," he said, motioning to PFC's adjoining plant, "you can get the best pad and rotor performance combined."
PFC declares it was "the first brake pad supplier to bring an asbestos-free solution that could stop a 16-ton loader at 35 mph." On the heavy-duty equipment side, it makes pads to cover hundreds of applications, including Caterpillar Inc., Clark Material Handling Co., Volvo Truck Corp. and more than 30 other off-highway vehicle manufacturers. Its street pad lines offer upgrades for nearly every make and model and are manufactured to meet or exceed OE specs.
"Even though our products are more expensive overall," Mr. Adams added, "it ends up being a lower cost per mile."
PFC counts among its street-pad customers police car fleets, which are very hard on brakes, and several driving/racing schools including the Bob Bondurant School of High Performance Driving. It also supplies brake components to a varied list of companies, including Ford Motor Co., General Motors Corp., Delphi Corp., Penske Racing, U-Haul International Inc., Ryder System Inc., United Postal Service, Freightliner L.L.C., U.S. Postal Service, Brembo North America Inc. and Allied Signal Inc.
In the motorsports arena, PFC said drivers running on its brake products such as Race Ready Carbon Metallic pads chalked up 121 championships in 2004, including Nextel Cup, CART and Formula 1 and "hundreds of races won in 2005."
As Mr. Burgoon likes to point out, a NASCAR racer may have some other brake maker's name stenciled on the side of the car, but many teams actually run Performance Friction brakes on the racecar.
Part of the problem with the brake business today, according to Mr. Gilsdorf, is "installers can't find the quality products they need. When their customers go to an installer at an independent shop and they get a set of inferior-that means 'cheap'-parts installed and they experience problems, that makes them want to go back to the original equipment (OE) dealer, where they think they'll get a better-quality product."
That translates to lost opportunities for independent shops.
The kind of installers PFC is after, Mr. Adams said, are those "who do a good job, use quality products and try to get customers for life. We try to get a good product to them so it solves their equation. Racing teams, fleets appreciate the quality. We think independent installers also will."
Mr. Gilsdorf said the key is product availability. "If you have a busy operation doing 50 to 100 brake jobs a month, or less, you have to have the product available."
While brake noise is a common customer complaint in comebacks, he claimed bigger concerns-based on results of J.D. Power customer
expectation surveys-are factors like soft pedal, stopping power and pedal travel. Still, many brake manufacturers tend to promote their pads' biggest selling point as being "quiet."
According to the Automotive Aftermarket Industry Association (AAIA) 2002 Fact Book and internal PFC estimates, OE dealers garner about 32 percent of the brake market because, the company said, "the installers/customers can't find quality through traditional distribution." The total market for automotive and light truck is estimated at about 74.3 million brake pad sets annually-and of that, 66.8 percent are premium based on consumers who specify they want "premium" pads installed on their vehicles.
A further breakdown of those AAIA statistics for the premium aftermarket indicates independent installers have a 9-percent share while, Mr. Burgoon noted, car dealerships' automotive service market share is growing at about a 30-percent clip per year.
In citing noise tests performed at independent labs, PFC claimed out of 1,917 total stops, its pads had the fewest noisy stops-five-vs. 10 competitors' products. The company, which invests about 12 percent of its sales in research and development, also claimed that independent tests show it had the best performance in rotor thickness loss and pad mass loss. Its literature touts that PFC doesn't "just copy OE-we make it better," and its pads exceed OE standards.
Although PFC markets to jobbers and distributors, it recently launched a consignment inventory plan aimed at cracking a bit more deeply into independent shops. Its "Performance Friction Authorized Installer" program features what execs dubbed a "perpetual inventory system" managed by the company's proprietary software system.
Simply put, when an installer signs on to the program, a shop gets two shelves containing 140 part numbers of PFC products with 80-percent application coverage. "We essentially want to get the product to them so it's available and they don't have to call around for it and waste time waiting," Mr. Adams explained.
"We pay to have the product shipped to them," Mr. Burgoon added, "so there's no downtime or obsolescence."
Each installer is given a pass code to gain access to and log into PFC's Web site, where they can check on part numbers, applications and availability. Though the company has set up a database software tracking program that performs best when the program's online component is used-and Web-based ordering is the preferred method for parts acquisition-shops without Internet access can still participate by phone or fax.
The company can tailor product mix based on an installer's customer base, according to Mr. Burgoon, and it also has a technical support staff on site at its headquarters to answer calls from technicians.
In order to make the program work, at the end of each business day a shop must log onto PFC's Web site to submit a report on the amount of PFC product sold-including all lost, stolen or damaged product. If none is sold, no report is required.
At the end of each month PFC will download to a shop an invoice-resembling a phone bill-based on the shop's part usage.
The beauty of the system, according to Mr. Burgoon, is that a service shop that already has PFC product on the shelf orders more when the supply is low and the product is shipped-paid for by PFC-before the shop's stock is depleted.
"What's going to make this system work is limiting the shop's outs because the problem they have with other inventory systems is they never have enough inventory on hand, or replenishment isn't fast enough, or someone is always trying to lean out the replenishment system to the point you have outs. Then you're constantly hot-shotting the parts."
With PFC's system, "Sure, there's going to be cases when you might have to go out and buy something," Mr. Burgoon said, "but a lot less than they're currently doing." And if need be, PFC can overnight a part to a shop.
One large independent tire dealership that chooses to remain unidentified has been using PFC's brake products for a couple of years and participates in its installer consignment program. A dealership official told Tire Business, "The product has worked wonderfully for us," though he would not comment on whether or how much the pads have reduced comebacks or boosted profits, citing proprietary information. PFC executives called the dealership a success story it hopes to duplicate with other independents.
Admitting it's a "high goal," Mr. Burgoon said the company hopes to sign on about 3,500 independent installer locations-with a special focus on tire dealerships-within a year.
Leaner not always meaner
When companies go to what they're fond of calling "lean manufacturing," Mr. Burgoon said they cut out things like how many times a part is touched.
PFC is attempting to lean-out the supply chain, he contended, by cutting out the middlemen usually responsible for the increase in a part's cost. "It goes to a warehouse," he said, "then to the next guy, then the next, and everyone in the middle wants to make 35- to 50-percent margin.
Where the money is for a company is most efficiently getting the part to where it's going to be utilized.
"We need to be the most efficient, cost-wise, while still putting value into a product. The best way to do it is to efficiently get the parts to the installer on a cost-effective basis."
By going direct to installers, the middleman is eliminated, thus reducing costs as well as lift time as a tech waits for a part to be delivered. And while the execs readily admitted the firm's premium pads are somewhat more expensive than competitors' products, after putting a pencil to a typical brake installation, they sketched out how an independent shop using PFC components could realize a 38-percent increase in productivity and a 61-percent boost in profits.
"Trying to replace products with the cheapest thing you can buy is not necessarily bringing customers back," Mr. Burgoon said. "There's Chinese-made (brake) product coming in to the U.S. for $3.27 per box delivered to retailers, and there's just no way to build a (good) product for that amount."
PFC's plant capacity for disc brake pads is 360,000 per week or 18 million annually, though Mr. Burgoon said the plant is not running full-bore. It turns out 2 million rotors annually and has capacity to get to 10 million per year after adding some equipment. The company anticipates its forged aluminum monoblock caliper business-admittedly a small-volume, high-end specialty-could hit 250,000 units per year.
Officials would not provide sales figures, but Mr. Burgoon noted that, "size-wise, we're tiny" compared with the large corporations that manufacture brake brands-such as Federal-Mogul Corp., Brake Parts Inc., Akebono Corp. and Honeywell Corp.'s Bendix Brakes division-among a variety of products, though Mr. Gilsdorf said PFC has "huge market share in racing."
The company said its products are "environmentally friendly"-that is, its brakes "are safe for the technician, the environment and driver, a standard not maintained by all brake manufacturers."
Its pads contain no hazardous materials such as asbestos, lead, antimony, cadmium, chromium and potassium titanate.
What helped solidify PFC's environmental approach, Mr. Burgoon said, is that "our corporate officers work at our manufacturing facilities. We breathe this stuff everyday and," he paused to laugh, "we don't want to die."
Corporations that move operations offshore to skirt environmental laws will "sooner or later have to deal with it," he continued. "We're not doing that. We're staying here."
In the next five years PFC plans to concentrate on the aftermarket. "We're committed to it," he said. "It's a huge market and we want to be a dominant player in it for top-flight installers."