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December 5th, 2008
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10 Questions

with Ronald Adams
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March 26th, 2008 issue

Adams says Tatra is working on several mine-resistant military trucks with partners around the world, including in the United States.
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THE ADAMS FILE



Job title: Chairman and CEO, Tatra
Age: 57
Nationality: American
Previous position: President, SDC International
Education: Business studies, University of Oklahoma and Texas Christian University
At the end of March, the Czech Army is set to receive the first 27 trucks it has ordered from Tatra, the historic Moravia-based vehicle manufacturer that has been in turbulent times since its privatization early this decade. The army will gradually receive 295 of the trucks, fulfilling a 2.6 billion Kč ($161 million) order made in 2006. Tatra’s American CEO, Ronald Adams, talks to The Prague Post about his prolonged leadership at the company, emissions standards and Tatra’s efforts to expand in the United States.
? You’ve had a long involvement with Tatra. What about the company first drew your interest?
I first came to the Czech Republic around 1993. I saw a tremendous engineering and manufacturing capacity but I did not see much marketing and financial acumen. So I thought it would be a good combination to bring marketing and financial capability from the United States and combine it with the great engineering and manufacturing of the Czech Republic.
As you walk along life’s path, you kick up a few stones along the trail, and one of the stones I happened upon was Tatra, actually through a chance meeting on a flight from Atlanta to Prague in 1995. When I first saw the Tatra truck and then Tatra’s tremendous facilities in Koprivnice, I felt there was a world of potential and great possibilities for the company.
? You’ve had a circuitous route in seeking leadership of Tatra, first controlling it through SDC International, which then had to sell Tatra to the U.S. firm Terex. Can you clarify Tatra’s ownership situation over the past few years?
After leading the group to buy Tatra from the government in 2001, we knew Tatra would need a significant injection of capital. But before we even had time to raise that capital, Tatra lost considerable money due to the unhedged currency. Our efforts as a small investor to raise the capital ourselves were not successful enough in a short period of time. So our partner, the large U.S. company Terex, made a deal to buy our shares in Tatra and then to put the necessary capital into Tatra to save it. After SDC sold its interest in Tatra to Terex and was paid, we distributed the funds and closed SDC as a company.
I stayed on Tatra’s supervisory board as a Terex representative. They put the capital and the more important restructuring efforts into Tatra and really stopped the downward direction it had been taking for years.
The next step was to grow Tatra, and that is where my interest was strongest. So when Terex felt they had done all the restructuring they could do for Tatra; they decided to sell. After an offering procedure, I was the winning bidder.
? Earlier this year, Tatra opened an office in the United States. Why do you feel Tatra could succeed in the U.S. market, and how do you plan on growing your position there?
Tatra is being well received in the United States. Because of our special off-road and rough-terrain capabilities, Tatra is the solution for several particular markets. We will build vehicles for the oil and gas industry because the fields discovered and worked today are far off the beaten path. We are furnishing firefighting trucks for the brushfires and wildfires in California, Nevada, Arizona and other states. And we have become of great interest to all branches of the U.S. military due to our special off-road and high-mobility trucks, which can move soldiers and equipment to and from places where other trucks cannot go in today’s wars on terrorism.
? Speaking of the military, the U.S. Army is investing heavily in MRAP vehicles, which are heavy trucks designed to resist mine explosions. Is this a market Tatra is looking to enter?
Tatra provides excellent trucks for APC (armored personnel carrier) and MRAP (mine resistant ambush protected) vehicles. We have just released and tested Tatra’s first four-wheel-drive APC in the United Sstates and we are working on several new APC and MRAP products in four-, six- and eight-wheel-drive models with partners around the globe.
? You mentioned Tatra’s off-road capabilities. Which features of your trucks make them suitable for these environments?
The Tatra suspension and chassis system, originally developed in 1923, is still used by Tatra today. Of course, it has been updated and modernized continuously. But it is the only one of its kind and it has proven to be a real champion for heavy-duty off-road trucks.
? I saw that the truck you’ve developed for the Czech Army recently passed tests that it had initially stumbled on late last year. What problems did you encounter the first time around and what did you have to fix?
When a new product like this truck is developed, there are always many items the producer or the initial customer wishes to change on the prototypes. So these items were not so much “faults” as they were changes or modifications needed to please the customer, in this case, the Czech Army. We worked closely with the army and we have finished a truck that Tatra can be proud to make and the Czech Army can be proud to use around the world.
? The European Union has proposed much stricter emissions standards for vehicles, set to take effect in 2012. The Czech Republic is seeking to delay them until 2015. Would such a delay be important to you?
The standards are necessary but costly. In the end, we will all have to pay for a cleaner environment. I think in the larger picture of the world, 2012 or 2015 is not the critical factor. Most important is that we begin taking steps to improve our environment for many years in the future.
? Tatra has a long legacy of automobile production, which ended last decade. Have you given thought to returning to the sector?
We would not come back to compete with the large automobile mass producers such as Volkswagen, Škoda, General Motors, Ford, etc. But we might come back with a replica of the old Tatra cars using a current undercarriage and driveline from one of the major automotive producers.
? Škoda has complained that the rapidly appreciating crown has cut into its profit margin. Has the crown’s rise hurt your business?
It has been damaging, because 80 percent of our trucks are exported. But we are now able to purchase more materials in euros and dollars, so we have some hedge against the negative effects of the strong crown.
? There’s been much talk of the shortage of skilled laborers domestically. Has it been difficult for Tatra to find these workers?
We have been fortunate to hire more than 1,000 new workers since we took over a year and a half ago. But finding or developing more good people is one of our greatest challenges for the future.
Want your manager to answer our 10 Questions? Contact Paul Voosen at pvoosen@praguepost.com


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