Fast Track

Fasttrack/–“/dt1st/mark2nd SNAPSHOT: Company Founded: 1953 Revenues in 1995: $23.5 million Revenues in 1997: $33.9 million Projected Revenues 1998: $37 million Employees in 1995: 761 Employees in 1997: 917 Top Executive: Eric Stromsborg, president and chief executive Goal: To be the leader in providing test drivers and related support to customers requiring automotive reliability and durability testing Driving Force: Current trend to outsource technical support By JEANNETTE DESANTIS Contributing Reporter Employees of Kett Engineering Corp. get paid for driving through the streets of Los Angeles. But they’re not shuttling passengers they are test drivers for some of the auto industry’s newest and most modern vehicles. “That is the fun and interesting part of the job,” said Eric Stromsborg, president and chief executive of the Van Nuys-based electronic testing firm, which provides drivers for General Motors, Chrysler, Nissan and Volkswagen-Audi. Kett entered the testing market quite by accident. The firm started as an aerospace consulting firm in 1953. In the early ’80s, Kett acquired a small company that had one automotive customer. “We didn’t consider it to be significant at the time until we were invited to bid on a contract at the GM test facility in Arizona,” Stromsborg said. “It was then we realized the potential growth for the market.” At first, the auto side of the firm was just a way to diversify the business. But by 1990, with profit margins shrinking fast in the aerospace business, Stromsborg could see the writing on the wall, and Kett left the aerospace business behind. Industry watchers say Kett made its move at the right time because automotive testing is increasingly being outsourced by the manufacturers. “Before, engineering was done in-house, but more and more it is being done out of house because it is more cost effective,” said Christopher Cedergren, managing director of Nextrend of Thousand Oaks, an automotive consulting firm. “Basically, it allows car manufacturers to be more flexible because they don’t have the overhead that is associated with an in-house engineering support team.” He expects more opportunities for smaller firms like Kett. “It really is an emerging market,” said Cedergren. “To survive today, companies have to lower their costs and run lean and flexible operations. That is the name of the game.” Kett performs reliability and durability tests for cars and their components, as well as providing test drivers. In 1998, Kett drivers racked up 23 million miles on test cars, Stromsborg said. Last year, Kett drivers maneuvered eight new Volkswagen bugs on L.A. streets before the newly designed Beetles went on the market. It took them just a few months to put 100,000 miles on each car with a rotating crew of drivers, driving three shifts a day, seven days a week. “We had a lot of people following our drivers back trying to find out where they could get that car,” Stromsborg said. Usually, though, testing is done in highly secured surroundings. Tall security fences enclose Kett’s testing facilities, where no photographs are allowed, no auto parts are taken home and each contract contains confidentiality agreements for the firm and each of its drivers. “These car manufacturers are testing prototype cars that they are planning to produce three or four years from now, and they don’t want the competition to know what they have,” Stromsborg said. “The whole industry is very low key.” Some of Kett’s competitors are corporations with an international presence such as Kelly Service, which offers clients automotive, construction and medical testing. “We have just found a niche by concentrating solely on automotive testing,” Stromsborg said. “Other companies cannot be as flexible as we can because they are larger and are spread into more areas.” That also means Kett can provide better service, Stromsborg said. “We are more responsive to customers’ requests and adapt to their needs more quickly, which allows (car manufacturers) to be more flexible,” he said. “In this business, it is not so much the pricing that makes you competitive, but the service you offer.” The most difficult part of the business is attracting and keeping good, qualified employees. “After several weeks or months driving on L.A. city streets or test tracks for eight hours a day, and then jumping into your own car to drive home… well, people tend to quit,” Stromsborg said. Kett typically pays $7 to $9 an hour and requires all drivers to have a clean driving record. Kett also performs pre-employment drug tests and random drug tests on its employees. What attracts most drivers to the job is the ability to get out from behind a desk and race around in state-of-the-art cars at speeds of up to 140 miles per hour. Stromsborg, who joined the company in 1973 as a college graduate working in the personnel department, rarely finds himself on the track, but when he does, he too finds it thrilling. “You really have to have a passion about driving to be a test driver,” he said.