Interview of the month: Jon-Erik Burleson, master of KTM North America
We travelled to California to meet the man who has helped turn KTM into a major force in the U.S.
Jon-Erik Burleson oversees KTM North America inc; the subsidiary that has pushed the company to be the fastest growing motorcycle manufacturer in the U.S. in 2013. We went to visit the President of the rapidly expanding empire in Murrieta, California (a fair hike southeast of Los Angeles). After an enthusiastic tour by the gregarious ‘JE’ of not only the KTM facility but also the huge new Husqvarna building next door and the slightly smaller WP Performance Systems installation up the road we sit down to talk about the rise to his position, the role of supercross for KTM in the USA and how he has managed the orange ‘bloom’ in this part of the world.
You’ve been in KTM for almost twenty years. So how did you originally come to the company and how did you make it to the top?
“I was going to college and wanting to race enduros but wasn’t good enough to get a result. I was on a trail ride and bumped into the President of the company called Rod Bush and he said: ‘I can help you go racing with bikes and parts but you’ve got to come to work every day’. That was a bit of a challenging decision for me but I knew pretty quickly that I wasn’t a fast enough racer so I thought ‘let’s turn this thing into a job’. So I started in sales and was mediocre on a good day, but I tried really hard and put my head down. A few years I wanted to go to graduate school and Rod offered me the opportunity to move out of sales and into finance and helped me go back to school to get my MBA. That was my number one goal and I managed that in 2001 and in that process I’d say that was where stage two of my professional career started to develop. I stepped more into the backend of the business with finances and IT. Rod turned out to be an important mentor to me in terms of my business development and career with KTM and in July of 2005, essentially on his 50th birthday, he called me to say he had pretty serious cancer and he needed to get checked out. He never really came back into the office after that. His cancer progressed quickly and in September of that year he passed away. He was the President at the time and then there was an opening that had to be filled. I was just thirty years old so I was very young to take such a position and also from a guy who had been doing it for twenty years. I had an obligation to step-in and do what I could to help the company manage in such tragic circumstances. We had a couple of guys over from Austria involved to help make that transition but very sincerely it was tragic, too soon and too young. We had our ups and downs but like when I was in Sales … you just put your head down and go through it.”
So what happened then?
“By 2007 we were growing the business quite well but then the dollar collapsed. We needed to make some strategic changes. Through discussions with Austria we made some recommendations that for the next stage of our business we had to change our HQ location. We needed to re-size and went from 160 people to 60 in a short period of time and relocated to here in Murrieta. We wanted to be closer to the heart of the industry and the leading trends of motocross as we saw that as our next focus for conquest. We moved here in ’08 from where we’d been since 1976 and a small town just outside of Cleveland. You can imagine with the heritage that exists with the Penton family and things like that it was a pretty big shock to the system. Overall you learn, you grow and you develop.”
What was your perception of KTM as a brand before you joined the company and did that change once you were on the inside?
“We’re talking mid-1990s when I joined so it was fresh out of bankruptcy. It was the year when they bought Husaberg. My dad worked for Husqvarna and I knew some of those guys so I kinda figured the brand was going somewhere. I didn’t have a negative view of it but it was a very small company. We were doing just a few thousand units in sales and I think I was just the twenty-second employee at that time! Even though KTM had been around for a long time it was really small. The Husaberg move was a good signal to me that something was changing. In my first few years I learned that there was a different company culture here; one of aggression, opportunism … a chance-taker. Doing things a little more innovative. That has been in place from then until now and probably what has kept me very interested. Ultimately we are a motorcycle company and I love that more than anything. We are not doing musical instruments and boats and lawnmowers and all kinds of other stuff. We are about motorcycles.”
“Ultimately we are a motorcycle company and I love that more than anything. We are not doing musical instruments and boats and lawnmowers and all kinds of other stuff. We are about motorcycles.”
How has it been managing essentially a big branch of a company with such strong roots in another continent?
“I think in any subsidiary it is tough. The parent company always has a parent role and the subsidiary has a subordinate role; that is frustrating and there is no way around it but at the same time you get as much support as you do frustration! When you add six thousand miles of distance and nine time zones it gets to be difficult. The biggest thing you need to develop is a good team and a good working ethic, relationships and ultimately all that turns to trust. The hardest thing I’ve had in that second phase of my career was building trust with the right people. When you have that team, trust and communication then the whole thing just ‘works’; there is not a lot of effort to it. As you grow a company and pass through things like going from 160 to 60 people and now were are over 100 again and there are 1500 in Austria then there are always going to be little personnel issues and the time zone doesn’t help. However I have to say that some of the people I have known and worked with since I have been at KTM, nearly twenty years, are some of the best relationships that I have and I cherish the most. The longer the relationship is and the best we can connect for the sake of the brand are the ones that are the most fulfilling.”
It is interesting what you say about the subsidiary role because the USA must be one of the biggest markets for most motorcycle manufacturers so it must give you quite a bit of power?
“Maybe it is a failing of mine but I don’t really like to think of ourselves that way. When you pound your fist and say things like ‘hey, we’re 25% of global production and I want this!’ then this gets you something in the short-term but we work to build trust so that when we say something it is a good idea for the company we get the support all the way through. I’d rather prove our team’s success through the merits of what we want to do. It is through merit and effort that you can achieve. If you start relying and banking on size then the minute the dollar goes into the garbage then your size doesn’t matter so much any more and that argument falls by the wayside. A career is like running a whoops section; you just want to skip on the top and by doing that it means good work and good decisions that people will understand. It probably sounds a bit political in nature but I’m not one to bang the table. To draw a parallel, the most interesting thing I have experienced actually is in racing. I’ve seen over time that the best guys we’ve had under our umbrella are extremely confident but don’t have an ego. You don’t see Roger de Coster banging his fist saying ‘I’m Roger de Coster!’. He just does a good job and people listen because he has good input. He has a tremendous career of success behind him and people trust him. When I see what someone like him has managed in his career and with his personality then that is the ‘Holy Grail’ right there.”
Moving into racing then … how emblematic has supercross been and how difficult was it to convince the bosses that it was worth the investment of reconstructing the team, getting Roger and the riders?
“It was a challenge! The first obstacle was to try and relate motocross sales to supercross racing; you’ll never see a good penny come out of that. It is a struggle. I can only really speak for the United States but supercross is the pinnacle of motorcycle racing, so for a brand to do well in supercross has a positive benefit on everything you do. We sell more spare parts because of supercross, we sell more Adventures because of supercross. Our biggest sales gains came in every segment except motocross when Roger joined our group. I live, sleep, eat and breathe the American market every day so we see supercross and we see the 60,000 fans every weekend. When you witness market share gains in other areas of your business then that’s where it all ‘clicks’. Maybe it can be hard to grasp by watching it from a vast distance. For my personal career I have two or three inflection points, and for our company and brand there are also these key ‘moments’ and I think one of those was the day that Roger decided to join the company and it is a move that has had far-reaching results.”
“We sell more spare parts because of supercross, we sell more Adventures because of supercross. Our biggest sales gains came in every segment except motocross when Roger joined our group.“
So looking ahead is there a plan for when Roger decides that thirty weekends of racing is too much?
“We for sure are building a strong team. There are a few races that Roger won’t go to and that is when people like Ian (Harrison) step-up and take that role. There is a strong enough team in place that we don’t have any concern. Flipping that around I don’t think any of us actually see Roger wanting to step away from it. That is the fuel for his engine. I think we’d be surprised if in the short-term he came and told us he wanted to stop. I think he lives for racing. However it is important to talk about the support structure because it isn’t just about one guy. It is a complete infrastructure and the best thing about it is the support we have from Pit Beirer (KTM Sport Director) and his team. That’s what made it work. As well as the R&D guys. Without Pit and Philipp Habsburg (R&D Director)’s full commitment then Roger’s success would have been tougher to achieve with us. The thing I am proudest about is that when Roger was with other brands they had sales but didn’t have such breakout sales success. Since Roger joined us in almost every metric of our business we’ve had huge improvements. We were the largest growing motorcycle brand in the United States this year with over 20% retail growth in a flat market. So we’ve been able to capture something in our business. Roger really pushes you to be excellent in what the company does and with us it turned into business results as well.”
Taking the nobs off the tyres how is KTM North America progressing on the street side?
“I think it is a natural evolution. Five or six years ago we were trying to get our market share foothold in off-road and that got to a point where it is pretty good and we can maintain it. You have to grow as a business and you have to diversify as a business. We want to be a motorcycle company, not a dirt-bike company, and one that has that ‘READY TO RACE’ mantra through everything we do. As a guy that loves motorcycles then the product that Austria is producing – just through the 1190 ADVENTURE and the 1290 SUPER DUKE R – is it extremely inspirational and motivating to see how good it is. Then there is no question about whether we develop ‘street’ or not. We have a product that is too good to be anything else but successful.”
Is the U.S. territorial when it comes to machinery? Can you work on that basis when it comes to the different bikes?
“Well, for sure the United States has regions that are very different. And some of the biggest markets for dirt-bikes are very different to those for Street. It is almost as different for ADVENTURE and SUPER DUKE as it is for motocross and enduro; it is just swings across pocket by pocket. Fundamentally though the sun-belt states are where the biggest markets can be found just because of the weather, so California, Texas and Florida. Second to that you have the mid-west and the great lakes like Michigan, Ohio and together they are almost as strong as California. I think California will be an excellent market for the ADVENTURE for us. Florida will be good but it is pretty heavily into dirt-bikes from an overall perspective. By having a broad product mix is how we tackle the regional pockets and demand.”
There is a little empire growing now in Mattighofen and Munderfing with Husqvarna coming onboard and WP also close by. How has it been for you in the past year to cope with three brands?
“We are so far away (from Europe) that we just have to do things on our own when it comes to infrastructure-stuff. If you look at the difference with what we have worked on with the KTM side, the Husaberg side and now the Husqvarna side and going forward – the WP side – we just try to read the strategy of what we see in Mattighofen and say ‘OK, if they are willing, let’s do the same thing here’. From my own personal perspective I am exceptionally loyal to the brand and to the board of KTM. When you see the things that someone like Mr. Pierer is building and accomplishing I just want to be able to help with what they are doing on a global perspective come true here in the United States. Quite frankly I just want those guys to be able to come here and be proud that this little subsidiary on the other side of the ocean is doing well and looks like it is representing a collection of premium brands in the best way.”
Through those phases of downsizing, moving and growing again can you tell me some of the key business lessons that you have learnt?
“Business lessons pertinent to being a successful person at KTM: you gotta be flexible and open-minded. Whenever you do something on your own then you are going to have difficulties so the more you try and get a good team that collectively works towards a common goal that’s far more successful than anything one person can do. I really saw that in the transition from Rod, to the ups-and-downs of the financial crisis to moving the company. Team and trust are the biggest issues, on multiple levels and from here to Canada to the guys still in the Ohio office and then of course in Austria. We are all trying to do something that hasn’t really been done in our market.”
“[…] so the more you try and get a good team that collectively works towards a common goal that’s far more successful than anything one person can do.“
Can you still feel a little like a kid in a sweet shop? Come into work and say ‘well, I’ll take that bike for a spin today’?
“I like anything with two wheels and if I don’t ride for a while then I get kinda grumpy and not so good at my job! I can abuse it a little bit and took the chance to go riding with dealers on the SUPER DUKE launch and I like to ride to lunch or ride home at the end of the day. Currently I’m on the 1290 SUPER DUKE R. I like getting out because it kinda centres-me back to the world. I like to know that we really build good products. I’m not sure if I am like a kid in a candy store. I am a little bit more committed when I know we make really good stuff. Then it becomes a responsibility and we are supposed to do the best we can for the hard work the guys in R&D have done. To do the bikes justice. I have other things that I like to do that make me giddy with life such as hanging out with my family and kids but if I don’t ride then I get all whacky.”
So a lot of saddle time then?
“My dad was a racer and I rode with him at the recent Husky launch. I would say I go to the track once a week with my kids. I couldn’t care less if they raced or not I just want to see them having a deep love of motorcycles and I think it is happening already … all the way down to my five year old. It gets a little bit hard sometimes because you go to the track and guys just want to talk about work and it’s tricky to separate, but on the other hand unless I’m taking an Adventure ride with my wife on a Sunday, at the track with the kids or doing a track day with some of the guys at work then it is hard to centralise your soul on the job, if you will. Sometimes life can get pretty boring. Rod used to say to me ‘man, we don’t work for an ice-cream business’ so if you are not getting excited from what you do … then why do it?”
“Sometimes life can get pretty boring. Rod used to say to me ‘man, we don’t work for an ice-cream business’ so if you are not getting excited from what you do … then why do it?”
Lastly how do you feel about KTM North America now and the position you are in?
“Well I gave you the tour earlier and I’m super-proud of what the guys have accomplished here. I’m proud of our little campus and the trust we have. We have a small R&D group, the WP wing and a good investment from the parent company. We don’t always do everything they want us to in the right way – which is subsidiaries do I think – but in the end there is a strong link there. When I hear from senior management in Austria good things about a guy who works here then that’s probably the pinnacle of pride for me. If there was something I’d like to wave the flag about then it is how much we are doing and the people that are carrying that out.”
Photos by Ray Archer