Interview – Garrett Wilson

This is the DBI Global’s inaugural interview, hosted by Enkhzul Orgodol in Mongolia.

Garrett Wilson is the Executive Director of Wagner Asia Automotive, a Mongolian car dealer that provides Jaguar,Land Rover and Ford. He was originally from America and provides a comparative perspective of a corporations operational concerns.

He also delves into some of the national economic considerations such infrastructure and the impact of Mongolia’s neighbour, China, as well as his heuristics for identifying future high performance industries.

Watch the interview to find out all this and more.

Interview Transcript

Enkhzul Orgodol: Garrett, I would like to think me as a foreign friend of yourself, interested in investing and doing business in Mongolia, and I’m seeking your advice and expertise related to doing business in Mongolia, based on your background, and everything. I’d like to start, a bit of your personal background.

Garrett Wilson: Sure.

Enkhzul Orgodol: You first came to Mongolia in 1998, stayed here for a couple of years, and then they came back to the States, started your own life, family.

Garrett Wilson: Mm-hmm (affirmative).

Enkhzul Orgodol: When was that, met your wife?

Garrett Wilson: I was here from ’98 to 2000, then I returned to the States, finished up my degree, and while I was still a college student, I met my wife, in the States. She’s a Mongolian, who was studying in the United States. We, of course, started a life there, in the States, before 2011, when we were contacted by the company I work for now, Wagner Asia, so that started a journey of us coming back here to Mongolia.

Enkhzul Orgodol: Right. You decided to come back to Mongolia after 12 years, right, since your first time in Mongolia?

Garrett Wilson: Mm-hmm (affirmative).

Enkhzul Orgodol: I wonder what were the main reasons that prompted you come back. Was it something, attractive package, maybe something like attractive package Wagner Asia Group offered you, or was that more of the growth potentials of the country that you could foresee it, at that time?

Garrett Wilson: I would say the main motivation for me coming back was mostly emotional.

Enkhzul Orgodol: Okay.

Garrett Wilson: When I was first year in Mongolia, I gained an affinity, an affection for all things, and everything Mongolian, particularly the people. I loved the culture here, I loved the language. I loved the fact that it was still developing, still emerging, whereas my home in the United States …

Enkhzul Orgodol: Which is?

Garrett Wilson: And in a lot of the Western Developed World … I’m from Salt Lake City, Utah.

Enkhzul Orgodol: Right. Okay.

Garrett Wilson: I always wanted to come back, but I never had the … I was still looking for the right opportunity, and it just so happened that with the development of some local resources, namely the uptake in the activity in mining here in Mongolia, primarily beginning with the Turquoise Hill project, and I think dating back to, probably, 2008.

Enkhzul Orgodol: Right.

Garrett Wilson: That really was the catalyst that started the whole economic upturn, and spurred the development here. I saw that from afar, and I wanted a part of it, and luckily, Wagner Asia was able to find me, and introduce me to their operations here, which now I’ve been here for, with the company for six years, in Mongolia for five years now.

Enkhzul Orgodol: I see. Okay. Well, I’m glad you came back, but unfortunately in one of your interviews you mentioned that the timing of your return was not perfect, maybe. Or was not the best time because 2012, when you came to Mongolia, was kind of the onset of economy turmoil. We’re still a bit going through it, at the moment. Your company, Wagner Asia Group, and also Wagner Asia Automotive managed to, not only survive, but maybe in some ways, even thrive, especially during the couple of years being the official distributor of official Jaguar, and Land Rover Automotive, right?

Garrett Wilson: Mm-hmm (affirmative).

Enkhzul Orgodol: Et cetera. Could you share, maybe three main business strategies that you think your group took to survive in this harsh economic time?

Garrett Wilson: Sure. You’re right, my timing was bad, in that I went … My arrival in Mongolia was counter to the strategy of buying low, and selling high. I came in right at the peak, or right after the peak, I guess you could say. Since then, the past four or five years, of course, have been economically a struggle. We have had to downsize, and our revenues have taken a hit during that time. It’s been a struggle to maintain profitability, however, like you mentioned, we have done things within our own company to still enable us to stay strong, and still be a major market player here in Mongolia.

Some of those things, I could name specifically are, first of all, we have strengthened the core values, or reinforced those core values amongst our employees. In the Wagner Asia Group, we now have 450 employees. That’s down from our peak, but still …

Enkhzul Orgodol: Down from?

Garrett Wilson: Our peak was about 1,100, back in 2012.

Enkhzul Orgodol: Okay.

Garrett Wilson: It’s down rather significantly, over 60 percent reduction, but we still have a commitment to those 450 employees.

Enkhzul Orgodol: Right.

Garrett Wilson: 99 percent of whom are Mongolians, who are locals, because the companies that we represent, Ford, Jaguar, Land Rover, on my side of the business, and also, Caterpillar on our group side of the business. They are major world brands that have world standards, and a reputation to protect. Our skills have to match that, and have to meet their standards, so we do have to spend quite a bit on training/development, which we’re glad to do. It provides us competitive advantage in a market that doesn’t have a long history of that kind of technical skills …

Enkhzul Orgodol: Exactly, yeah.

Garrett Wilson: Among the workforce.

Enkhzul Orgodol: Yeah.

Garrett Wilson: So, keeping those, retaining those employees is, of course, important to us. How do you do that when you can’t give somebody the raise that they’ve deserved? We’ve focused instead, a lot on creating a much more welcoming and pleasing environment for them to work in. One that’s not hostile.

Enkhzul Orgodol: Speaking of young employment, or young employees in Mongolia, how would you, in general, define the Mongolian workforce? What do they excel at? What do you think they should work more on improving to meet the international standard? Et cetera?

Garrett Wilson: Firstly, the Mongolian workforce is relatively young, but I have seen across Mongolia, a great deal of age discrimination, where it’s a question on your job application.

Enkhzul Orgodol: That’s true. Yes.

Garrett Wilson: You have to put your birthdate, whereas where I come from, that’s illegal. I’ve seen job advertisements saying, “We are looking for somebody between these ages”.

Enkhzul Orgodol: Not only age, but also, maybe sometimes, your height.

Garrett Wilson: Oh, yeah. Yeah, you have to put your photo, and show you how pretty you are, and stuff like that. Some cultures, I understand, that’s totally acceptable. If someone could come in, and find a way to tap into that, and be able to utilize that segment of the market, I think it would be a great opportunity because you’re using a part of the market that’s … They’re still skilled, they’re very knowledgeable, experienced, and … Plus, it’s part of a good corporate social responsibility to diversify your workforce.

Enkhzul Orgodol: Definitely.

Garrett Wilson: Give opportunities to anybody, regardless of age, or gender, or whatnot.

Enkhzul Orgodol: It seems you took your job, or position as a Managing Director of Wagner Asia Automotive, less than a year ago, right?

Garrett Wilson: Mm-hmm (affirmative). A little over a year ago.

Enkhzul Orgodol: A little over a year ago. Oh. That was when?

Garrett Wilson: November of 2015.

Enkhzul Orgodol: Okay, November of 2015. Which part of the business did you have to work more on? Was it more to do with the people, the process, or more to do with the profit making?

Garrett Wilson: My focus has been the past year on a few areas, one of which has been restoring our employees’ satisfaction. Because economic times were challenging, and we’d gone through some rough years. Our morale was down, I think our teamwork, our ability to work as a team, had suffered a little bit, so my first responsibility was to them. Now, and always, they’ve been my family, my extended family. As an employer, we need to take care of them, so we’ve taken steps to try and improve that, and we measure that by doing an annual survey amongst our employees. The managers, the executive group ourselves, we do a 360 degree survey, have our employees rate us, and we’re held accountable because ….

Enkhzul Orgodol: Anonymous? How do you ensure …

Garrett Wilson: Yes, it’s anonymous.

Enkhzul Orgodol: Okay.

Garrett Wilson: Executed by our HR department, partnered with a third party survey provider, because we want to know. We’re held accountable. It’s part of my remuneration structure.

Enkhzul Orgodol: I see.

Garrett Wilson: If I don’t treat my employees well, they’ll report back, and in turn, my performance will be evaluated …

Enkhzul Orgodol: That’s interesting.

Garrett Wilson: Or accordingly, if I don’t uphold my responsibility to them.

Enkhzul Orgodol: What else did you have to?

Garrett Wilson: We also had to … We had incurred significant Account Receivables. We had been too loose on our credit terms. With the contracting economy, cash flow, the money supply, certainly has taken a hit, so the liquidity of our customers, and of course, a lot of our customers are businesses, suffered, so our collections have been a struggle. We’ve now got that into what we think is under control, and have put policies in place to try and control that going forward.

It does mean, sometimes tighter credit terms for some people, or credit might not be available to some of our customers, whereas it previously was. That, can often times, hurt your top line, but it makes your bottom line a little stronger.

Enkhzul Orgodol: Which percentage of your revenue is coming from your business clients, whereas the individual clients?

Garrett Wilson: Exactly? I’d have to look at the numbers.

Enkhzul Orgodol: Approximately?

Garrett Wilson: Approximately, you’re probably gonna be in the 50 percent range.

Enkhzul Orgodol: Okay, so it’s 50/50.

Garrett Wilson: There are quite a few fleet customers that we have because we have the Ford line. On the Range Rover line, those are more individuals. You’re not buying a fleet of ten Range Rovers, most typically, and so, on the Ford side, it is more of a utility vehicle, a work vehicle, and particularly in the mining, construction, agriculture sectors, which are, of course, are strong among Mongolians, so we do have quite a few business to business transactions.

Enkhzul Orgodol: Interestingly, in one of your company pages, I found … Well, interestingly, as in a foreigner. I found that there was warning to the customers regarding some forged, or counterfeit service providers offering same kind of services like you, for lower charges. I definitely see it as a potential challenge of doing business in Mongolia. What are the challenges? Different challenges do you face when you are in the automotive business? Not only automotive, actually, international trade related business in Mongolia?

Garrett Wilson: Like you mentioned, the competition is fierce, even in Mongolia, where you are geographically so isolated, and so you would think the importation of competitive products and services, unless it was through an established company, would be difficult, but Mongolia has had 26 plus years of open market economy experience, and in that time, people have come in, and filled the roles.

For example, in our business, automotive, automotive service repair, we pride ourselves in being an official authorized dealer, and so we can only sell parts that are factory direct, that are authentic, that come with a warrantee. But of course, Mongolia, being in such close proximity to China, is so susceptible to those, I don’t want to call them knockoffs, because some of them are branded separately, so you would never confuse them with the originals, but of course, they come at a fraction of the price.

Enkhzul Orgodol: Yeah.

Garrett Wilson: Our stance is, obviously, we value and push factory original quality, and we back that with guarantees. Sometimes, economics comes into play. There can be other challenges, as well, related to competition. Especially fair competition. Despite the challenges, relatively speaking, our stance is that Mongolia is relatively stable in that regard. There are laws in place that protect intellectual property, that protect our right as importers, and so we try and do what we can to stay in good graces with all the government entities that we deal with, whether it be the customs, or related to licensing, or permitting, because we’re here for the long term, and we do want to do business right.

We know people cut corners. There’s certainly rampant corruption, which can give one of our competitors an unfair advantage. We just have to live with that, and accept that as a reality, and try and push on despite the handicap of not having the advantage of bribes … Government official, and whatever in that regard.

Enkhzul Orgodol: What is your, how would I say? Tactic, or strategy, in going around that problem at the government or the public sector? [crosstalk 00:15:36]

Garrett Wilson: For us, at our company, we’re a family owned company. The Wagner name is a family name. We have to protect that, and respect that, that he’s a man of the Wagner family. They’re a family of principles, morals, values, and they would never want their name associated with …

Enkhzul Orgodol: Illegal activities.

Garrett Wilson: Illegal, or even unethical business practice, might not even be illegal. That’s a responsibility we have. Also, we are here for the long term. We’ve been here 20 plus years, and we want to be here for 20 more.

Enkhzul Orgodol: Or even more.

Garrett Wilson: Yeah. We want to preserve that reputation. It is important for when our paperwork comes across the desk of a decision maker, they see Wagner Asia, and they know, “I’m not gonna be able to ask for any sort of commission, or any sort of money under the table on this, because Wagner Asia won’t pay”. That might put us at the end of the line, that might cause us a few delays, but we’re willing to accept those in exchange for respect. In exchange for trust.

Enkhzul Orgodol: You’ve still managed to sustain your role, or position, as one of the major importer, or distributor of heavy machinery, and other automotive

Garrett Wilson: Sure, we’re still … In the automotive sector, we’re still considered a top dealership, although volume wise, there are other dealerships that do more volume than we do currently. We’re not willing to go after that number one position, if it means we have to do backdoor deals, or give money under the table, or take money under the table.

Enkhzul Orgodol: Sure. I’m very glad to hear that there are opportunities for foreign owned business, or any business in Mongolia to do well while doing well, right?

Garrett Wilson: It’s possible, certainly, and Wagner’s proving that. If the products and services that you’re offering is valued, there will always be demand for it, whether or not the person buying it thinks … If it’s procurement officer, if they think they can get a 10 percent cut, what’s in the best interest for their company, is to buy the vehicle, or buy the equipment that makes the company money. That’s reliable, that’s profitable for them.

Enkhzul Orgodol: Right.

Garrett Wilson: In the end, that does win out a significant amount of time. There are deals that we lose because sometimes personal interests outweigh what’s in the best interest for the company, or for the government.

Enkhzul Orgodol: Earlier, just now, actually, you mentioned about being close to China, could be disadvantages to some businesses in Mongolia.

Garrett Wilson: Mm-hmm (affirmative).

Enkhzul Orgodol: On the other hand, there are a lot of foreigners, or foreign investors who are looking into Mongolia, looking at Mongolia as a gateway, or a springboard to access larger market like China.

Garrett Wilson: Mm-hmm (affirmative).

Enkhzul Orgodol: Would you agree with that?

Garrett Wilson: Sure, absolutely. There are … Now China certainly has embraced free market economic principles, even though the government may have a little more restrictive stance. Economically speaking, they’re open for business, and Mongolia, in my personal opinion, thankfully, embraced that and done business with Mongolia, even though geopolitically speaking, they have been mortal enemies for centuries.

Enkhzul Orgodol: Right.

Garrett Wilson: Mongolians aren’t naïve. They know that so much relies on their neighbor to the south, economically speaking, even politically speaking. You’ve seen that with the exports, that go so much of the percentage, I believe, is 80 plus percent, 85 percent …does go to the neighbor to the south. Certainly, the materials, the imports that come in, a lot of that does come from China. Some of it, decent quality. Some of it, obviously, very poor quality. It does provide, at least, a product, or service that Mongolians of any economic level, can afford.

There are huge opportunities on the natural resource side, clearly. That’s one of Mongolia’s biggest opportunities and sources of wealth. Now, and into the unforeseeable future, because for example, like the copper. That goes into so many products and services that are manufactured in China. The coal, down to the steel mills for producing the steel in China. There’s a symbiotic relationship between Mongolia and China, but it’s not exclusive, and Mongolian’s recognize that and they are very wise to also seek out other trading partners.

Years back, America was valued as a third neighbor. Now that third neighbor has become several additional companies …

Enkhzul Orgodol: Countries, yeah.

Garrett Wilson: Additional countries. Korea has a big influence.

Enkhzul Orgodol: Japan.

Garrett Wilson: Japan. Obviously, the Germans. The Canadians. It’s really become internationalized. It’s really become a hot market for a lot of investors from various countries, because there are so many untapped resources, or newly developing resources here, whether it be the lands, whether it be the resources, the agriculture, the animals, or even the labor force here, albeit small. I believe they’re capable.

Enkhzul Orgodol: Speaking of future potentials for development, with regard to Mongolian economic sectors. In one of your other interviews, you mentioned that you would be interested in running your own business in the long term. Say, that would be in Mongolia. Which business sector would you like to go in, or which business sectors do you think have the biggest potentials for the next five to ten years, besides the mineral resources, natural resources?

Garrett Wilson: Sure. For me, I originally, when I envisioned creating jobs in Mongolia. When I envisioned starting up a company here, the first thought that came to my mind was, Mongolia has so few value added services, in regards to manufacturing. They have a lot of raw materials. You can take animal husbandry here, and all the leather, and meat, and the byproducts that can come from the herding culture here. The value added services to make that accessible, or available to an international market. The right standards for meat, or leather goods, to me, that seemed like … That was the first thought that came to my mind.

I have since cooled off a little bit on that, although, perhaps it’s because of my lack of familiarity with that sector. In part, because of the logistical challenges. Mongolian infrastructure still needs to be developed. Although it is, they’re building more roads, and certainly, hopefully, we have additional railroad capability soon. That would enable access of Mongolian goods, products, to external markets.

As recent as just a couple weeks ago, just as a specific example, I met up with a guy, some guys, who are running an animation studio, and they do world class animation, graphics, special effects. They make full length …

Enkhzul Orgodol: Mongolian?

Garrett Wilson: Yes, they’re Mongolians.

Enkhzul Orgodol: Great.

Garrett Wilson: It’s really good quality, and that is a product, a service, that can be exported without any barriers. You don’t have to have access to an ocean port. You don’t have to have a railroad, or commuter access. You can be anywhere because obviously, this information transferred over the internet. They could be subcontracted out, a Hollywood production company to special effects for the next James Bond movie, or whatever. You know what I mean?

Enkhzul Orgodol: Especially in this area of technology and internet.

Garrett Wilson: Yeah, whereas Mongolians have the skills, the intellectual … The capacity here is very great, but the cost of labor, is relatively cheap. You could get the best of both worlds, and technology is high here. The skill, in terms of Mongolian’s ability to utilize and …

Enkhzul Orgodol: To learn.

Garrett Wilson: To learn the technology, like something as high tech as 2D and 3D animation. I could see services like that, that are more driven by their intellectual skills, moreso than actually exporting raw goods. They’re exporting products and services, but not products and services that requires logistics, transportation and … That got me excited.

Enkhzul Orgodol: A lot of factors that are beyond the business people’s capacity.

Garrett Wilson: I would love to see Mongolia become a hub for filmmaking, for animation, for …

Enkhzul Orgodol: Content export maybe

Garrett Wilson: Yeah, because Mongolia does have such unique landscape. Being able to come film, make movies, in places where completely remote. There’s not even a sign of man. There’s not fences, there’s no roads. That kind of landscape is unique to Mongolia. Hopefully they could find a way to utilize that, in more ways than just travel and tourism, like they have. Maybe they can become the next Bollywood of Central Asia.

Enkhzul Orgodol: Or Mollywood, right?

Garrett Wilson: Mollywood. Yeah, yeah.

Enkhzul Orgodol: Yeah. Recently, the economic downturn in Mongolia turned Mongolia from the land of Land Cruisers to the capitol of Prius. You and Wagner Asia Automotive decided to go even more luxurious by becoming the official distributor or the dealer of Jaguar and Land Rover last August, right?

Garrett Wilson: Correct.

Enkhzul Orgodol: Could you share some of the insights of the market research that must’ve prompted you to make that decision?

Garrett Wilson: It was mainly driven by our partner at Jaguar Land Rover. Jaguar Land Rover is one company now, and has been for several years. They’ve created that duel branding product offering because they’re two separate classifications. Our Land Rover/Range Rover vehicles are well known for their four wheel drive, their off roading, but they’re still luxurious, and very high end SUVs.

Whereas the Jaguar, again, it’s another English brand, it’s not a brand … Manufactured in the UK, but they are primarily sedans, and sports cars. So, the two compliment each other. You could have in one family, both a Range Rover, and Jaguar, without cannibalizing one sale … Your sales internally.

Enkhzul Orgodol: Exactly.

Garrett Wilson: The demand for luxury vehicles is still relatively high, as a percentage to population here. Mongolians appreciate quality. As much as they appreciate quality, they also appreciate style, and looking good.

Enkhzul Orgodol: Very much.

Garrett Wilson: Using vehicles as a way to express yourself, and show other people …

Enkhzul Orgodol: Your status.

Garrett Wilson: Your status, your wealth, your status in the community. What a better way to do it than in a Jaguar, or a Range Rover, where yes, it’s comfortable.

Enkhzul Orgodol: It’s also expensive.

Garrett Wilson: Sure. They’re not on the cheap end of transportation, but we believe that we’re representing a quality brand in the Jaguar Land Rover line of products. It’s a good time to invest in that right now. You want to buy low, sell high. Right now, we think the economy has bottomed out, and there’s only blue sky up ahead, and we will establish that brand here in 2017. By 2018, and beyond, when we do foresee the economy picking up even stronger, we’ll have already established the Jaguar brand as a known entity, as a known brand to Mongolia, and hopefully be able to capitalize that in the next five to ten years.

Enkhzul Orgodol: You also chaired the Auto and Machinery Committee of AmCham Mongolia. Can you share some of the pressing issues you’re working on to tackle through the committee?

Garrett Wilson: Sure. As part of the American Chamber of Commerce, we of course, meet regularly with other business entities who are members to discuss challenges, things that we’re facing, that perhaps, if we unite, we can overcome.

A few of the issues we’ve taken up as special cases do relate to the automotive sector, specifically, we’ve petitioned the ministry of development of roads and transportation, I believe it was short as a month or two ago, to address key issues such as the prevalence of right hand drive vehicles, when left hand drive is currently legal in Mongolia.

Another issue that we have tried to address as the AmCham, specifically, as the Automotive and Machinery Committee within the AmCham is the importation of very old vehicles, vehicles that are ten years and older. The majority of vehicles coming in, the vast majority, are aged vehicles, ten years and older. That creates huge problems, not only on the emissions, but vehicles that are unreliable …

Enkhzul Orgodol: Safety.

Garrett Wilson: Can now break down. Of course, they might have safety defects, or issues, that when they’re not fixed. We’ve tried to address some of those issues by petitioning to the government, and they’ve heard our grievances, and we’ve seen reports in the media recently, of them addressing that for the 2017 budget.

Enkhzul Orgodol: Congratulations for that. Yeah.

Garrett Wilson: Yeah, thanks.

Enkhzul Orgodol: That’s a great news. Okay. Garrett, thanks a lot, for very insightful discussion, and all the best in your future endeavors.

Garrett Wilson: Absolutely. Thanks for having me.

Enkhzul Orgodol: Hope to see you again.

Garrett Wilson: Appreciate it. Thanks.

 

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