Andrew Pace

Welcome back to ACS Portfolio Perspective. I’m your host, Andrew Pace, Chief Client Experience Officer at ACS, joined today by Mark Musumeci, Director of Risk Operations at Oval Financial Services USA Mark, oversees the full spectrum of VFSUS risk operations, account resolution, collections, repossession and remarketing for one of the world’s most recognized captive finance companies. Serving the Volvo Trucks, Mack Trucks and Volvo Construction Equipment brands. A graduate of Volvo’s Early Career Professionals Leadership Program and a Monitor Magazine 40 Under 40 honoree, Mark has spent more than a decade building a risk operations culture grounded in process discipline.

Vendor partnership and intentional leadership. He has navigated Volvo Financial Services through one of the most sustained downturns in the commercial transportation sector has seen in a generation. Mark, welcome to the show.

Mark Musumeci

Thanks Andrew. And you make me sound really good, but I’m gonna, I’m gonna stop right there and say I’ve got to give full credit to the team because they have gotten us through a whole lot over the last few years. But thank you. I appreciate the intro and I’m happy to be here.

Andrew Pace

Glad, glad. Glad to have you on. I’m honored to have you with us today. With your experience working inside a captive finance organization, I want to start by helping listeners understand the mindset and operational approach that makes captives unique.

From your perspective, what makes a captive finance company fundamentally different from an independent? Lender when it comes to collections and recovery.

Mark Musumeci

Yeah. No, that’s a fantastic question. And I think the first thing is you know we always talk about here at VFS, why do we exist? Our captive finance space is pretty unique. We exist to help the, our OEM partners sell more trucks, sell more construction equipment.

Keep the factories busy and and successfully manage that from a portfolio perspective on my end and my team to make sure that we’re supporting those brands, but also operating as an efficient finance company that is profitable and helps our overall group and adds value to the stakeholders. So one of the things that we really look at as a captive is how do we support that brand? How do we support the Volvo and Mac and Volvo construction equipment brand?

Help them move more equipment, more trucks, but also do in a way that makes sense and that’s sustainable for us to continue operating as a successful finance company. I think that balance can be very challenging at times, but it’s a challenge that’s very rewarding and. I think when we remember why we exist and what we can do, there’s great opportunities that come forth with our customer base and with our dealer networks and with our OEM partners.

Andrew Pace

You know, in talking about those partners, how do you balance the priority of protecting the Volvo, Mac and Volvo CE brands while still delivering strong portfolio performance?

Mark Musumeci

Yeah, it it is really quite the balance. You have to have a team in place and I think I know that we do that’s very skilled at what they do. It can’t just be purely just hard collection effort after hard collection effort after going to repo, etcetera. Yes, we still have to draw the line in the sand.

Yes, you still have. To have that skill set to be able to kind of hold customers accountable to their contractual obligation. But I think the bigger picture is understanding that relationship and that every conversation that you’re having can impact our brand and the overall look, it also comes into factor with selecting good partners. ACS that we utilize, we use you guys for on the repossession side and historically the collection side as well.

It really comes down to vendors that understand our brand and can kind of shift to help us support what we’re trying to do. Again, hold the line. When we need to, especially in the a downturn, a freight recession, an extended freight recession for multiple years and ultimately keep as many of our customers in their trucks or construction equipment as we can and knowing how to balance that with when it’s time to move forward. And still be able to perform in a good way, to be able to keep delinquency at a healthy level, to be able to still go after the avenues so that we’re not losing money for our group.

It is quite the balance and there’s no perfect. Nobody has the crystal ball on what’s going to happen next, but I think when we understand the relationship piece of it, team does and they’re tasked with doing. They value those relationships but still know how to get the job done.

It’s not for everybody, the captive space, but it’s very rewarding when we have success stories.

Andrew Pace

For sure. And as you talked about relationships, what role do customer relationships play in decision making during challenging collections collection situations?

Mark Musumeci

Yeah. Again, a good question. It plays a huge factor in those decision making time frames because you could have a customer that’s not cooperating, not communicating whatsoever. But fortunately as a captive finance company, we do have our dealer partners, we do have our OEM partners that sometimes will get involved.

And help the customer understand that full picture relationship and say, OK, this is more than just your bank calling up and saying, hey, you’re due on this. It’s how do we make it and get this customer full circle through this down cycle, through whatever they’re dealing with this downturn management to be able to get them out on the other side to ultimately. Buy more Volvo trucks, more Mack trucks, more Volvo construction equipment and understanding that perspective and how to bridge that gap. We’ve seen a lot of success stories where we do get those customers through those times and it doesn’t work every time.

We know that there will be, there will be failures in our line of work and in this industry. But the ones that we do help through those downturns, whether through modifications, sometimes you know payment relief, we might be willing to do that from a bigger picture relationship aspect to support our OEM’s, to support our customers and what they’re doing and understanding their business. I do feel a sense of tie to these customers and their businesses, a deeper understanding than maybe and not to say we’re perfect, I’m far from perfect, but it is nice to know the industry that we serve and I look at it that way. We serve this industry, we serve these customers, we’re offering a service to them of finding.

We, you know, everybody knows captives don’t typically have always the cheapest rates, but it’s where we add that value to that customer when they’re going through something. And the team here does a great job of understanding that and trying to help the customer through anything that we possibly can. Keeping that in mind, I think gives us that bit of a extra advantage in those discussions. They understand we’re connected in with the full manufacturer and dealership, the full picture there with the customers.

Andrew Pace

Thank you. And for collection teams that you know outside the captive world, what special handling requirements are most surprising or perhaps most misunderstood?

Mark Musumeci

Yeah, I think knowing the industry, but it’s like there are also there are industry segments and regions and pockets of challenges that you know a lot of non captive banks might even have better insights than we do on certain things, but it’s understanding those. Customers, it’s understanding, OK, are they hauling just general freight or are they bringing refrigerated goods from the border down in southern Texas all the way up across the country? They’re bringing auto parts up to Detroit. Are they bringing produce over from California over to the East Coast, etc.

So understanding. The customers taking that deeper dive, frankly it does take some extra time. You have to develop that relationship. So I would say even a non captive space, that relationship and understanding goes a long way and when you end up having a workout scenario for a larger customer, whether you’re a captive finance company or an independent.

Or a bank. I think it adds value when you understand your true, truly what your customer is doing. And when you have those discussions with them, they realize they know they can pick up pretty quickly if you actually care about their business or if you’re just simply just dialing for dollars and just trying to get that next payment. When you talk about, OK, yes, this is great that we’re getting through this time that you have made these payment arrangements, but what’s next?

What’s your next 30 to 60 days? What’s your, what’s your turn around plan look like? Are you, are you downsizing your fleet? Are you picking up more profitable hauls?

We recently just actually it’s a Volvo Group product. Volvo and Mack Trucks has a load Finder. That we paired with another partner that’s now offered a free service to our customers. So my team is a collections account resolution that is customer facing has a ton of customer touch points.

It’s a value add for us to share that out with our customers and saying hey not only are we calling to yes. Get our payment and get payment arrangements and maybe a potential modification or workout arrangement, but also here’s something to help you and your business being able to give the customer something back and not everybody will have that opportunity. We’re very fortunate that we have that from the bigger Volvo Group picture. But I think understanding that customer, understanding truly what they do and what they need from you as their lender helps you form that partnership where you can, you can call, you can create a bond that really lasts for decades if you do it right so.

Andrew Pace

Right. You know, it’s great advice. It’s, you know, they’re not just an account number, they’re they’re, you know, it’s it’s all about, you know, building the relationship. Is there an example where protecting the brand guided your approach differently than a traditional lender might?

Mark Musumeci

Yeah, I I think I can weigh in on a somewhat recent example. We had a relatively mid-sized large fleet that was really struggling. We had gotten input that of how critical this was to the bigger picture. The dealership specifically, it was their largest customer for this respective dealership and then it was also a pretty big player with our OEM partner Volvo Trucks.

So those things factored in. We still had to make sure that we’re abiding by our kind of policies and procedures, of course, and making sure that terms stayed reasonable. But I would say we probably gave it that extra call, that extra involvement where we had multiple layers of our leadership team in addition to our account resolution specialist in that case. Being involved, having those discussions with the dealership, with the OEM partner and to me that’s an opportunity.

Did it take more time? Was it a little bit extra time out of my personal day and some others on the team and my leadership team? Absolutely. I mean, we had four or five or six people at any given time working through.

Through this workout arrangement, but, and I can’t say that it’s all rainbows and butterflies. It’s not some of it. You really have to have some tough conversations, but taking a step out of that and seeing the big picture while also still kind of educating people in the collective group that, hey, we still do have a job to do. Do here to collect this money, to bring it in, to keep it as a performing contract and assets on our portfolio.

That’s an important thing and we go back to that balance, right? It’s like how do you balance the bigger picture Volvo Group or any OEM partner, what their goals are, what the dealership goals are, what the? Customer goals are and what’s actually reasonable. So it’s not always perfect, it’s not always pretty, but we navigate through and I think having those established relationships and having a dynamic team that can have those conversations that really can move the needle and save a customer frankly through a down cycle.

And and just to bring it full circle as we’re starting to see some life in the industry right now, you know some some good signs light at the end of the tunnel, we all hope right early in January and February and heading into March this year, you know spot rates, contract rates, those kind of things trending up. Um, you know, it’s something where if we can get these customers through that really tough time and they have a plan and they communicate that plan to us and we work through it with them, it’s very rewarding despite the extra efforts that it takes. Um, it’s worth it, right?

Andrew Pace

Oh, I mean 100%. I mean it’s it, you know, it’s all about preserving the relationship and when upper management gets involved, what kind of message does that send, you know, a struggling customer that you have upper management, senior level, executive level managers and and VPS getting involved and trying to help. Preserve those big key relationships. So that background sets the stage perfectly because the past few years have been particularly challenging for anyone supporting transportation, vocational or even construction equipment portfolios.

So let’s shift to the broader market landscape you and your team have been navigating. So looking back, let’s say the last three years, what were the biggest challenges your portfolio faced across, you know, the transportation and equipment markets?

Mark Musumeci

Yeah, fair. You said only three. I probably could talk about this for the entire segment, but I also I, you know me, Andrew, I don’t like to be a negative outlook person. I’m pretty positive putting a smile on my face each day when I walk in here and the team does a good job of that too.

But biggest challenges there has definitely been. Several, I think just starting off as you looked at as we came in from 21 and 22, the supply chain constraints, the issues of the OEMs delivering trucks specifically on the truck side, CE went through some of those challenges as well and we’re you know we’re a little bit different from a lot. Of lenders and that we support both spaces, especially on the captive side. CEE did face some of those challenges, but on the truck side, I mean people can’t get trucks and if you could get a truck, you were making a whole lot of money.

Times were good for those that had had units out there that they were running. They were very profitable, even ones that probably didn’t have the business acumen to be expanding were expanding. So that leads me into what were the biggest challenges. The first thing as soon as the market kind of corrected and came back down to earth as OEM’s were delivering these, not just Volvo and Mack, but all of the OEM’s and the trucking.

They started delivering these units, there was a bigger supply of trucks than there was demand. So that was one thing, you know parts of our business, not my area as much had to manage inventory with our dealer network as we’re getting these in and maybe there was as much demand. The thing is, there was a lot of demand still through early 2023 for those units. So first challenge I would outline is kind of navigating that when demand started to wane a little bit, but we still had pretty strong demand on our side, but I know some others in the industry struggled with that.

I think the bigger thing is when there actually started to be customer failures, we were well prepped for it because a lot of our team here actually went through the 08/09 financial crisis. We’re very fortunate to have some really tenured folks who have been here through those cycles. They’ve seen what it’s like for the entire portfolio to, for less lack of a better word, be on fire. Every, every single customer is struggling in those cases and that’s not what we had happen over the last few years, but it was very specific to the long haul transportation sector.

I think challenge one was as those started to happen, those failures started to happen. How do you navigate that? How do you be dynamic enough as a large global company to kind of shift your style to be, OK, well, if anybody wasn’t paying back in 21 and 22, it was because they just weren’t managing their business the right way. Versus as you got into 2023, 2024, continuing to 2025 and early 26, it really even the best of the best customers out there were feeling a financial strain because of the struggling market.

So how do you navigate that with the customers that, Oh well, we want to save every customer that became unrealistic, right? So how do you navigate? Through that initial downturn, I think that was challenge one. I think an additional challenge was, OK, as we’re doing workout arrangements, modifications, what do the logistics look like?

Fortunately, we had actually done a good bit of what we call downturn prep. Downturn management. So in 2021 and 2022, we spent a lot of time very intentionally. Our executive team, myself, my leadership team, we had a lot of conversations.

We looked at skill sets across the business, being a captive finance space. You have a lot of people within the operations, the credit side, even in even on our commercial sales team that have a background in different areas, being able to shift people in in knowing their strengths and and where they can shift to being able to be dynamic enough to make that adjustment. Bring somebody over, maybe into the back end of the portfolio to help, even if it’s for a temporary time frame. Just to use a small example, we had one of our senior credit analysts who’s underwriting large transactions, $10, $15, $20 million transactions.

Step out of the credit space, even though credit volume and application volume was still quite high, stepped out of that and came over and was helping us on the remarketing side because he was very knowledgeable of the collateral. He was well trained and was able to get up to speed with our remarketers. Again, another thing that we have here at the FS. Financial services that maybe not everywhere has.

We have our own in house servicing across the board all the way through to remarketing, a very tenured and experienced remarketing team. So being able to shift that, we were intentional about that downturn prep that helped us as we actually got to. The transportation, the freight recession, just to touch on one further main thing is the prolonged. Nobody had seen something last this long specific to the over the road long haul trucking.

You’re talking about going on three, 3 1/2 years, pushing towards four years where it really, you could argue, that it’s been in a freight recession at least three years minimum. That is something that really hasn’t been here. So how do you, how do you maintain that and what it came down to, Andrew, the biggest thing, you know, yes, your system. Your processes, your policies are very important.

You got to stay true to those things. Being able to shift and adjust with the market too as a global company like Volvo is, was a challenge, but what it came down to is people. And leadership and people stepping up and having each other’s back, talking through those challenging times, being there for each other, supporting each other. And I won’t get too emotional on here today, but you know, I have some personal things that have happened over the last few years where I knew the team had my back no matter what I was going through personally.

I would come in and I knew that they had my back and I had theirs and it’s amazing how far that went and our team because over the last three, 1/2 years, there’s probably a lot of teams on the operational portfolio side that have seen a lot of turnover. I don’t want to jinx anything right here, but we really haven’t seen that on our end. Most of our folks have continued to grow and learn and frankly they’ve been given more opportunities to even further their skill set in some of these workout scenarios that maybe they were more so doing just a historical collections back five or six or seven years ago. And we call our collections team account resolution.

That’s by design. There’s a lot more to it, especially in a captive space, than just collecting, just dialing for dollars. It’s really resolving. It’s understanding the customers.

But that doesn’t happen and that team’s not empowered to do that without support. So again. And it came down to people for us being there for each other, looking out for each other. There’s a lot going on in the world, obviously today, and just understanding that and being there for each other, building a culture where, you know, we have our VFS Volvo Group culture, but really a pocket of culture in the portfolio.

Man, it’s been tough times the last three years. Like it’s there’s never a dull moment and I joke around and we smile, we laugh and we keep it as light as we can because you get off a really tough call with a customer who’s having a failure and it’s just like, oh, I got to take a step away. But you have a teammate right there by your side or a team leader or a manager or somebody that. That’s right there with you that says, hey, are you good?

Do you want to talk or you just need a minute, take a step away, take a break, those type of things that matters. And I think while that’s been a huge challenge to navigate through this cycle, it’s an opportunity to build an even stronger team culture, which I feel like we’ve done and has led to a team that. Performs at a very high level and frankly people look forward to coming into work. I don’t know that that happens everywhere in a collection space, in a repossession space, in a remarketing space.

I feel like we’re pretty privileged to have that. I’m fortunate and truly blessed to have the people that I’m here with and that support me in a great way so.

Andrew Pace

Oh yeah, I mean you have an outstanding team and I that it’s that’s it’s hard to emulate what you guys have built and the culture that you guys have. But you said it, you’re, you know, when you’re hearing, you know, and working and talking through you know listening to all these struggles that that customers are having that can take a toll on an individual. And I think you know you kind of have to try to separate it.

It’s nothing personal, it’s not you, it’s just the seat or the role and you know it’s being more. Empathetic right. But yeah no you guys have a have a you guys have a great team and I I you know and I and I love how you how you I love the titles as far as an account resolution. It’s a positive.

It’s got a positive, you know, effect as opposed to saying collection special collections has a negative connectivity to it, right? So I love how you guys flip it to something more positive like, hey, we’re going to account resolution, we’re going to resolve this, right? It immediately says it’s we’re going to turn this into from a negative to a positive.

And and and resolve this the best way that it’s a win-win for both of us, right?

Mark Musumeci

Yeah, it’s kind of, it’s one of those things like it kind of a bit sets the tone, but also like if then you’re not actually doing anything to resolve those, the title for a role is one thing and I it’s really how you communicate and how you follow up with that customer and and how you how you do business and how we interact as a team is is really important. And I didn’t touch on this, but one other thing in that downturn prep I wanted to just circle back to is vendor management. That was huge. And I know you know how I feel about our relationship with ACS and I can’t thank you guys enough for what you do to support us.

We do have other vendors that we use for some of the same services as you know and I think that’s. Really important that I do want to highlight is, is that vendor management having those discussions talking about, hey, what does your capacity look like us understanding what is ACS and some of our other vendors, do you have capacity to take on more if the repos are going up, if there are more collection? Opportunities that we might be leveraging, what does that look like? Having those discussions that true vendor relationship is critical and was crucial for us as we had some relatively large fleets naturally fail as everybody has over the last few years.

Being able to coordinate that and still upholding our brand in a good way, that’s really important and has helped us quite a bit so.

Andrew Pace

Absolutely. And now we’re grateful for the long-standing partnership that we’ve had. I think this, I think our relationship goes back 2025 years I believe back to as long as I’ve been with ACSI think we brought Volvo on shortly after I started. So but no, it’s important you can’t, you can’t put all your eggs in one back.

You can’t rely on just one service provider. You have to have multiple options and there are some great ones out there too and it’s good for it’s good for a lot of reasons right. It’s it you know keeps everybody on their toes right. There’s somebody out there that you know that wants to earn more of your business so it’s.

That’s good for, you know, competitive reasons. You know, it’s easy to get to the top. It’s hard staying there. So, but yeah, you can’t just rely on one one company to do everything for you.

You got to have, you got to have, you know, a few different companies that you can rely on as well, so. What are you seeing or where are you seeing signs of stabilization or normalization heading in or or as we, you know, head into the middle of 2026?

Mark Musumeci

Yeah, great question. Um, so I touched on it a little bit already. One of the things that we’ve been fortunate and I say fortunate because we do have quite the diversified portfolio at BFS supporting the construction space. Supporting the vocational side, so our vocational and construction sides have performed quite well through the downturn, the freight recession, which has helped us maintain some stability.

We still have a healthy portfolio. We still have some customers that really aren’t feeling any of that pressure and stress like the over the road versus if we were 100% over the road that would take it to the next level of probably stress. Now to touch on stabilization, it really is that over the road trucking. We have seen some of it and I, you know, with spot rates, contract rates, rebound.

Rounding in January and February and continuing into early March, we are seeing that that is helping frankly some customers that we thought we had exhausted all efforts on and already given them maybe some payment relief and workout and arrangements and stuff and. It really, we didn’t know that they were going to make it or didn’t think that they would make it have now gotten a little bit back. They’ve gotten back on their feet. They’re starting to replenish some of their some of their cash reserves.

Their liquidity is getting a little bit better. Their cash flow is a little bit better. You know, we’re seeing some of that and again, I don’t want to jinx anything. I definitely don’t have the crystal ball, but seeing that is encouraging.

We know there’s so much volatility in the market right now and you know between geopolitical things specific and then there’s also a lot of. A lot of things that impact directly the transportation space and over the road trucking, but that’s seeing that stabilization has been very, very welcomed. I’ll just put it that way. Is it perfect today?

No, but is it, is it stabilizing? We are seeing that, yes and and and we’re hopeful that it continues because really. I think most predictions even as we were going into late 25 and in the first month or two of 26, we’re saying really it’s going to be like Q3 is when we start to see some relief. We’re feeling a little bit of that now, but again that can dynamically shift quite, quite quickly so.

Again, we’re prepped for anything. The team does a great job of being able to adjust on the fly, but having those fundamentals in place to know that we’ll be OK either way and we’ll try to navigate through with our customers either way. But yes, very, very welcomed to see. Some of these over the road, especially these medium sized, decent sized fleets, getting some stabilization in their day-to-day operations and month to month is encouraging.

Andrew Pace

For sure and I remember speaking with you in the fall and you had you know when I was asking for what your outlook in 2026 and and you mentioned you know quarter three of 26 is so you’re you know it’s your your prediction is you know almost spot on so. What lessons from this period will stay with you as long-term operational best practices?

Mark Musumeci

Yeah, fantastic question. I think the downturn prep every second that we spent on that, we got great return on investment when it comes to that pre downturn preparedness because what was it perfect? Did we have everything figured out? Could we have?

Plan for three, 3 1/2, four plus years of transportation downturn? No, you know, but were we much more prepared and were we agile enough? And again, this is as a large global company where we can’t just shift everything on the fly. It takes time and very intentional effort.

To shift the way that we do things and not that we’re changing on the fly all the time. We stay true to our fundamentals, but understanding that well in 2022, if a customer was past due again, it was probably because they were failing as a business and they just weren’t doing 21 into versus in 24/24. 5. Even early 26, there’s probably more just industry constraints and bigger picture constraints on them, even if they are doing things the right way and understanding that, being able to adjust to the team, maybe giving a little bit more flexibility, intentionally carrying a little bit more delinquency than maybe we were back in 21 and 22 without just this hard line.

Fast rule that at day X we move to this, at day X we move to that. It’s really easy in the automation world that we live in now in AI. I think it’s a great tool and I may be jumping the gun here if you have any questions about that, but it’s something where. We use the tools that we have and some of those can be very helpful, but still understanding that it’s the people that make the difference and leveraging those tools, but in understanding that like, OK, well, we can’t just be cookie cutter everywhere across the board.

We do need to be intentional and be efficient. We can’t. Spend 20, 30-40 hours every week on one specific customer because then we are disservicing our other customers and we’re not able to do that and portfolio performance won’t hold, right? But it’s again it comes back to that balance and when you have a team who.

Care about each other and care about the work they’re doing and care about their end customers. That’s where we kind of move that needle and see the success.

Andrew Pace

Thank you. And you know, you’ve described a lot of complexity and uncertainty in the market. Navigating all of that requires a strong team. And I know you’ve touched on it a little bit earlier in our discussion.

You’ve built a reputation for developing high performance groups, even in high pressure situations. So let’s shift into the your, your, your team and and the leadership side of your work. So in high stress environments like risk recovery, what does psychological safety actually look like in practice?

Mark Musumeci

What’s great is right as you’re getting ready to ask that question. I said I’m going to bring up the fact that we talked about and focused on psychological safety. So perfect, perfect. And for anybody watching, we did not plan that, but that was the perfect handoff.

So thank you for that. So about 2 1/2 years ago we actually didSo we have a Volvo Group university. It’s actually like a they do curriculum, they do training courses. There’s a lot of great opportunities for Volvo employees across the board to be able to go through.

I’ve benefited from going through several trainings, whether it be leadership training, whether it be. Training about the industry, the actual products that we have out there from a technical standpoint to be able to understand that at a deeper level. There’s a great opportunity through our Volvo Group University that we’re very fortunate to have. Again, I count my blessings with the opportunities that we have here.

I went through a development program myself, a nine month development program with Volvo. Group University to learn more about my leadership journey and how that went. But when it comes to psychological safety, we actually had a great, great opportunity to take our full account resolution and repo team in. So there was about 18 of us that went in through this course, our leadership team, everybody there, full transparency.

We went through some training. We did like it was almost a full day. First off was kind of like some training, some high level, you know, more theory. And then it was OK, what does this actually look like in your team?

OK, we think of ourselves as a high performing team. Let’s prove it. Let’s talk about some of the things that we’ve gone through making sure that. And we realize like we without being as psychological safety has been coming into more prominence in the last two, 2 1/2 years or so.

It’s one thing to say, yeah, we create a psychologically safe environment for our team. It’s another thing to actually hash that out and have that discussion with a formalized training. Professional that’s delivering this curriculum followed up by immediate discussion, directed discussion between the groups. So to me that was a really cool experience and realized like, OK, I thought of our team as yes, we try to create them very intentional about making sure that it’s not just a.

Oh, we don’t. You know, everybody’s happy and everybody’s best friends. That’s not what psychological safety is about. It’s about being able to raise issues.

If somebody sees something and says, hey, I don’t agree with this or this feels wrong or I’m seeing this, they can bring it up and we talk about it and we figure it out and as a leadership team that we listen to that. And act on it and that everybody’s held accountable, leadership included. We hold ourselves accountable to that degree and then we hash things out, we talk through things and it’s amazing that we had that opportunity. But also that I think we are even further along in that psychological safety progress and more mature as a group than I even thought we might be.

It was, it was really telling when we went through that and it was really encouraging and then it’s continuing to follow up. It’s not just a one time training, it’s. You know, practice what you preach and what you’ve learned. So we talk about things.

You know, every team meeting that we have, every, every group discussion, we talk about the important things that are going on. Not just, oh, here’s, here’s what we want to talk about because it’s the nice stuff to talk about. It’s like we talk about the issues and things that need to be addressed and performing and efficiency and just to keep going down a little bit into the rabbit hole, we have what’s called VPS here, Volvo Performance Systems.

So we actually talk about process improvements we go through and. We actually have the team implement things from their own day-to-day things. It might just be a small win here that saves them 5 minutes. Well, if you keep that to yourself, great, that saved you 5 minutes.

Maybe once a week. You share that with 16 people, all of a sudden you have a multiplier effect. So encouraging that, making sure that we’re performing. In a good way, yes, KPIs are very important.

We measure those, we track those, we have dialogues, one on ones with those, with our team leaders, our managers, myself with the team. But also the bigger picture is, hey, are we doing? The right things for the right reasons. And if we’re not, let’s talk about it and figure out how we can adjust to make sure that everybody is feels psychologically safe, that they’re going in to their day, that they have a place that they can look forward to coming in, even if it is tough work, collections repo that it’s it’s tough work, but.

They genuinely, I feel good that any of them that were on this podcast right now or hopefully when they listen in after the fact, truly believe that it is a safe place to go to and that they have support and that their their team members and their team leaders and leadership have their back. That’s important.

Andrew Pace

Sure. I mean it’s what’s the purpose, right? Like what, what is it that they’re trying to accomplish? And you know, it’s preserving relationships, it’s preventing, you know, from having to recover something and potentially taking a significant loss, so.

It’s really like what? What’s the purpose, right?

Mark Musumeci

You can tell I’m only a little bit passionate about it, right? So yeah, it matters.

Andrew Pace

Yeah, right, 100%. So you’ve experienced flex flexing staff across departments. What does that process look like and what makes it work?

Mark Musumeci

Yeah, it’s not always super easy, right? And it’s OK if it’s not perfect. If it’s not seamless, it’s the first time or two you do it. It frankly, it feels a little uncomfortable.

It’s like, OK, how do we fit the right skill sets? How do we actually logistically go about this? Having just simple things like them having the right access, them having. The right skill set to be able to do that.

But I think the bigger thing again comes down to people, not just one VP talking to another VP or one director talking to another director and saying, yeah, we’re gonna do this and shift it. And nobody actually has a conversation with the person to make sure that like, yes, you have to make strategic business decisions that sometimes at. Higher level that get passed down, sure. But when you actually have those dialogues and make sure that the person that’s gonna be going into it, the team that’s gonna be receiving that person or those people, everybody’s kinda on the same page.

I think that communication is key. I’ve seen instances where that’s not necessarily done and it kinda makes things a little choppy. Um. And you’re not able to get that person in and have them being able to deliver on an effective way as quickly.

Whereas if you have that upfront conversation, hey, we do need to shift this or maybe you’re deciding between a few different people and hey, we’d be OK from a leadership standpoint. Bringing any of these two of five people over to this group, let’s have the conversation, see who actually wants that challenge. My thing is I should know for each of my team members what they want to continue to develop in their skill set, what they want to achieve today, tomorrow, next year, in five years. If they’re happy where they’re at and they want to continue that through when they retire, I should know those things.

My managers, my team leaders should know those things about their teammates, about their team members, because then they know, hey, yeah, they are ready for their next challenge. Oh, they do have interest in this other area. Hey, if there’s an opportunity for a short term assignment. Or just a temporary assignment over here.

Let’s make sure we flag this person’s name to say, hey, they have a skill set, they have an interest in it. Let’s get them over there. They can help there. And so I kind of challenge everybody around Volvo and anywhere in the industry just to have those conversations.

And if you’re leading people, you should know what they desire in their career. Career, what they’re looking for. And sometimes it’s OK if they don’t want to be in that role. And I encourage people to say, hey, if you’re ready for your next opportunity and you want to go on and do something else or you’re unhappy in this role, let’s talk about it.

Let’s figure out how we can get you ready for that next step or another area, and preferably in the Volvo Group. But, or in VFS, but even for me, it’s bigger. It’s about the person and it’s about the people and making sure that makes sense for them. So if it is external, of course I don’t want people to leave Volvo if they’re here.

You know, I take great pride in developing our talent, but it’s understanding and understanding too when it’s when it’s the right time for people. So when it comes to that downturn prep. And shifting people in different areas, I think that needs to be an important consideration for it, not just an executive level decision that just somebody’s just told, hey, tomorrow you’re going here, next week you’re going there. Sure, that does need to happen in some cases, but like, I think that communication piece can make it a whole lot smoother.

For the receiving team and manager of that area, plus that person or people that are going to be shifting.

Andrew Pace

Thank you. So leadership inside the organization is one side of the equation, but strong vendor partnerships are equally critical, especially during downturns. So let’s wrap up with how you think about vendor relationships and operational excellence. So what role do vendors and external partners play in managing portfolio stress during challenging markets cycles?

Mark Musumeci

Yeah, fantastic question. Again, I think one of the things I’ve touched on a little bit in some of the prior questions, but I think one of the most important things are as we look at our vendors and we look at vendor management and who we want to partner with and who we want to grow the relationship with that we may already have a vendor relationship with historically. But we want to take that to the next level with other offerings and things like that. I think the biggest factor that comes in is trust.

Like I need to have trust and my team needs to have trust in our vendor, but also our vendor needs to trust us that we’re not gonna put them in a position to fail that I’m not gonna say, hey Andrew, I’m giving you these ten things and if the team. Doesn’t deliver on these and XY and Z and there’s no expectations already set like understanding that your agreements that are in place that whatever depending on different areas of the business, the pricing structure, things like that, that those are communicated that it’s not just a surprise to somebody that you work through those things. That you continue those relationships, that you have those calls where it’s not just, oh, a problem happened and that’s why we’re on the phone together. Having those proactive conversations about, well, how’s general performance going?

How are you guys doing? How is the team doing? Have you prepped for, well, if we get. more assets that are going to be coming through tomorrow, how do you handle that?

Those type of proactive conversations and and there’s been some great things that you know ACS and and DFS have been able to partner on of kind of some proactive approaches. And I won’t go too far into the details on that, but in with some of our other vendors and other areas as well, whether it be repo vendors, you know collections obviously as well or on the remarketing side, it’s not just me having those conversations, it’s some of our other leadership team being involved in those and understanding the relationship. So as we. Those vendors and whether it be a new vendor or just again furthering that relationship, to me it comes down to that trust and communication.

Performance plays a big factor too, right? So having those open dialogues, if somebody is not performing, yeah, you need to address it. But also I kind of like maybe I’m an outlier here in the. Market.

But if I have a vendor that’s performing, I’m gonna let them know that. Not to say, hey, you’re doing a great job, you can relax now and just kick up the feet. And because I have that trust that when I give that positive feedback, it’s gonna be taken away. Hey, let’s continue to do this because we’re gonna gain more trust and get more business from Volvo, from VFS and to me that.

That’s pretty critical to highlight the wins as well. ACS and some of our other vendor partners have been a true partner through some of the the downturn cycle that we’ve talked about in the transportation space. We cannot do this alone. I, you know, I think very highly of our team.

I’ve spoken very highly about our team. Without strong partners like ACS and several others, we do not deliver the results that we are delivering today. It just simply doesn’t happen. And our stakeholders at Volvo suffer as a result of that if we don’t have those vendor relationships.

So I kind of, I challenge the status quo of just saying, yeah, we have vendor talks when. Something comes up or has a problem. To me that’s not really good enough. You need to be having the conversations regularly and nobody has the time to have.

Let’s have a two hour call every single day. You don’t have time for that, Andrew. Your team doesn’t have time for that, nor do I. But taking that time to be intentional about those calls, that relationship building.

I think goes a long way, especially when you do have something that’s a bit unexpected or or there’s a big market shift. Well, you can go on the fly if you have strong vendors and strong vendor partnerships, so.

Andrew Pace

Agreed. I think it’s it, you know you want to have those either monthly, quarterly, you know touch point calls just to just to maintain that level of transparency. So you understand what the you know capabilities are from either a vendor service. Provider to you know even even on the client side, but you know as a good service provider you just want to compliment the existing team that you know the the the clients already have in place and just be an extension of that of that team and just be there to support support them and and whatever whatever they need.

And that’s really what it really boils down to. You know VFS, you guys have adopted process improvement approaches like VPS, 6 Sigma and Lean. How have those methods improved scalability or consistency?

Mark Musumeci

Yeah. No, another good question. I’d say we’ve had some small wins across the board, whether it be an account resolution just in terms of we have actually brought in some automation, but not in the true AI sense. It’s targeted automation, right.

So and it was actually brought forth by people. On the team that said, hey, our very early term collection attempts, there’s some customers we reach out to and as soon as we contact them one time, whether via e-mail or phone call, they immediately pay. It’s like, OK, well to me that’s an opportunity to say, well, if we can get a touch point out there that we didn’t have historically up until a few years ago. Of saying, hey, we just got a touch point out there through an automated e-mail.

That was something that is scalable. You can do that for the entire portfolio as a courtesy notice or you can be targeted with certain select profiles, you know, segments if you will, or areas of the business. So there’s a lot of opportunity there. We’ve had some good wins with that.

Taking it a step further, when it comes to on the repo side, we’ve had some really good again, it’s targeted automation. You know, telematics is a very touchy subject when it comes to, you know, personal data. Of you know obviously you’re not there to track individuals or drivers. It’s for the assets that are at risk in our case a repo or legal status to make sure that we can locate and and find those assets when needed and.

If you’re having a team member or multiple team members pull manual telematics every time we need telematics polls, there was a huge opportunity there. So we actually, we worked with our global team, some of our data visualization team and then we built that in with some. With some very targeted telematics tracking for a Power BI dashboard, we leverage Power BI quite a bit here at Volvo. So we got some efficiency from there and then taking it the next step further is sharing that with our vendors.

So ACS receives telematics from us that are very targeted. Only for the assets, cuz that’s what we have the use case for and legal clearance on. So you have to be intentional about that. You can’t just be when it comes to those kind of things like a telematics or any automation, you have to be pretty mindful of what are the real impacts, not just from a legal but policy standpoint impacting our customers and our.

Our dealerships and us internally, but that’s something else that we’ve been able to share that targeted telematics with ACS and other vendors specific to their portfolios so that we have a higher success rate that takes out. People from having to just manually pull telematics all day, every day. When you think about it, you know, is that a value add for somebody to just sit there and do telematics polls? Yeah, on occasion it’s good for somebody to go in and do that, especially if you have a very hot lead on something that you’re trying to secure and you know that it’s time critical cause the units at.

Great. But in other scenarios, is it really rewarding to somebody to sit there for 8-9, ten hours a day and be clicking through telematics, taking screenshots and sharing it over? Probably not. There was a better way to do it.

We implemented that and that was a huge win for us. Those are just a few examples. We’ve had some on remarketing side with just some again Power Automate being able to flow through. So it’s not 6 emails going back and forth for approvals.

It comes up directly through Microsoft Teams and still with all the same information, but it’s not as much of A manual type in process emails. Going back and forth, one got lost in translation. Nope, it’s documented, it’s saved. So we use a lot of tools like that and it just makes us better.

It’s not to eliminate people’s roles, it’s really to make us more efficient and give people work that matters and the team. Fortunately or unfortunately, there’s been plenty of job security in the portfolio management space for the last three or four years and beyond because of where our market’s been. But even beyond that, in the future, we’re very intentional at Volvo about not. Bringing on several people and then having to turn around and do any sort of like layoffs or anything like that, we’re very intentional about that from a staffing standpoint, getting a little bit off topic here, but just to kind of bring it back to the process improvements, there’s been some huge wins where it allows people to do the things that matter, have those.

Discussions that I was talking about before. Take that extra 5 to 10 minutes that you saved from one of the e-mail automations going to a customer that all they needed was really a prompt, a reminder that they have their invoice already and take that 5 minutes that you would have spent calling or e-mailing that customer and spend it to have a little bit further. Of a conversation to understand where that customer that’s failing right now or struggling right now, how do we get them over to the other side? And that’s where that efficiency gain, it leads to better results because not just the time savings, but then where can you take that time and put it into something that matters?

And you end up finding out that the team buys in more to that because they’re actually valued and their time that they’re spending is more targeted with things they want to do or or more important to them and to the bigger picture group.

Andrew Pace

Thank you for sharing that. That’s certainly a lot, a lot there to unpack. You know, that’s OK.

No, there’s a lot of information there for our listeners to get some Nuggets out of there. So lastly, how do you evaluate whether a vendor is a tactical resource or a long term strategic partner?

Mark Musumeci

Yeah, good question. Now I will be candid with you. I genuinely when I’m looking at a new vendor or a vendor that we have, my evaluation is usually targeted to say how do we make this a long term partner if they’re not already and really that deeper dive so. We tend to go more of that direction because if we’re gonna bring a vendor on it, it needs to be intentional.

The other approach can work and and sometimes it’s necessary, right, if you have a new need that you didn’t know you would have or or or a shift in in dynamics. But to me, if we’re doing vendor management the right way. Our vendors are prepared for those shifts. ACS is prepared when we do have a shift in the market or we have an outlier situation that we haven’t maybe had before or a little bit of a shift from what our norm is that you all are prepared.

We’ve already had those discussions. So we tend to focus on that development there as I’m looking at new. To new partners or anything like that in any of our spaces that I support or even across the business, it usually is pretty intentional at Volvo we typically and maybe part of that is the onboarding process by design is. Pretty in depth from a data security standpoint, from a deep dive standpoint, etc.

You know, there’s a lot of security breaches that take place out there in the world we live in today. So our data security team and legal team spend a lot of time there, so. We don’t just onboard just to onboard and quick for a quick use turn and then, oh, hey, we’re going on to the next vendor or anything like that. Certain projects and things may call for a more targeted approach like that where you’re really intentional about bringing them on for one purpose.

But to me, we do focus more on the strategic side. Now how do we do that? Talk about performance. We talk about conversations that you and I have had historically.

And now I know a lot of times it’s Martha, Martha Ross having on our team. Shout out to Martha. She’s fantastic. The whole team is great here, but she definitely helps with a lot of our vendor management and many other things in the portfolio.

And maybe it’s Tom. On your side and the team working through some of these things, but talking about what realistically, what’s the capacity? Do you have more capacity or are you guys pretty much full tight on understanding that whether it be repo, whether it be collections, whether it be with our remarketing vendors, all those things? To me matter and if you’re prepping the right way, talking about performance, talking about capacity, talking about skill sets, for me, I have to understand and our team has to understand, well, we might have to be kind of targeted with certain placements, whether again it be collections, repo, remarketing or other areas of business that I don’t maybe directly support at this point.

You have to understand your vendors strengths and maybe some areas where, hey, that probably isn’t their bread and butter. Maybe we can give them an opportunity in that space and see, but we talk about how do they get better in that area. I think having those discussions and. And being pretty transparent when something isn’t working the right way, but also highlighting, hey, we know that this is our vendor that is the absolute best at doing XY and Z.

We know that for this special handling situation to uphold the Volvo brand and to make sure that we do things by the book with this because we know. That there could be a lawsuit that could come down the road and not to put any vendor in a bad situation, but you kind of have to know which vendors can do what and maybe where some limitations are. And if there are limitations, then I kind of challenge people from. Lender or the actual finance company side to have those discussions.

It might be a little uncomfortable at first, but having those honest discussions and see where you can go with it and make sure that you know who you can rely on for what is an important part of the equation for us at least.

Andrew Pace

Thank you. Thank you so much, Mark. This has been a fantastic conversation. Your insights into the captive finance model, the market cycles your team has navigated and your approach to leadership and operational excellence provide tremendous value to our audience.

Before we wrap up completely, is there anything else you’d like to share with our listeners or any final thoughts you want to leave them with today?

Mark Musumeci

Yeah, I mean I would just say that I’ve enjoyed the discussion as well. Andrew, it’s been great questions and we always have good dialogues whether we’re talking about things that are going on in the portfolio or or just or or life in general as we’re developing our relationship between VFS and ACS, I guess. One thing I’ll just leave everybody with is that when it comes down to it and you’re there’s a lot that we covered today, you know the industry cycles, the downturn preparedness, vendor management, all these things, they’re they’re all very, very critical. At the end of the day, if you care about your teams and your teams care about each other, you’re gonna have so much more results.

It may sound a little bit cliche, but I can’t emphasize enough that taking that time to work with your people, your team. Have those discussions, make sure you know what’s going on in their life to the degree that you can help support them in the right way and and give them the grace that they may need on a certain day or a week or if they’re going through anything and just be there for them. That’s something that I’ll just leave is that that matters more than I can even say so.

Andrew Pace

That is, that is great advice. Thank you for sharing that. And now I like to end each episode with a fun question. Since you’re from Syracuse and a avid Buffalo Bills fan, here’s one that I think feels right.

So is Josh Allen already the best Buffalo Bill of all time?

Mark Musumeci

Oh, oh, I might upset some people with this, but and and and maybe I’m showing my age. Some would probably argue that for the record, I was alive during the four Bills Super Bowl runs. Was I old enough in the time to understand them? No.

But have I gone back and watched those VHS’s multiple times? I was. I was a bit of a toddler when we were making a run back in the early 90s. So I’m putting all that I’ve watched and rewatched.

Of course we know the four falls of Buffalo, the 30 for 30s. Special is painful for a lot of us, but seeing what I’ve seen over the last years, I’m gonna go ahead and say Josh Allen already is the best Buffalo Bill of all time. And that is a loaded thing to say, and I, you might be able to convince me that I. 

Andrew Pace

Wow.

Mark Musumeci

Maybe overstepped there. I think he has to do more in the rest of his career and maybe I should say that he’s on the trajectory to be that. But I think what he’s already done when you look at the excitement of Bills fans, just when you have discussions, what the team has done over the last and I know we I say we, I mean me. Just saying we, I didn’t used to say that about the Buffalo Bills, but with Josh Allen there, I say we.

I feel invested in that team and being a former athlete myself, I feel very connected to that team and I think Josh is just, he’s the right guy and he’s a great fit. Won the MVP, has led the team. You see the leadership side of him really flourishing now. He’s putting excitement in.

I mean, we talk about the new stadium that’s coming out this year. All those things probably don’t happen or probably don’t happen to the degree that they do without Josh Allen. I think he’s a franchise changing quarterback. And man, if he obviously to me, it doesn’t even become that much of a debate if he delivers a Super Bowl championship.

If we get a Super Bowl, then I, to me, that puts it. He’s at that level that I would struggle to hear any other argument, but. I’ll stop there. I’m curious what your thoughts are because I know that that’s kind of a loaded thing to say that Josh already is, but I think I’m, I think I’m right about there, so.

Andrew Pace

Yeah. Well, I’ll say I’d love your take on that and I will agree. I think he’s, his impact on the team in my opinion has been greater than any former player, right. Obviously the new state had he not been here that we’re probably not talking about a new stadium.

You know, there’s a lot of ripple effect. He’s created a whole new generation of Bills fans from all over the country and and even the globe because of his likability and you know, the fact that he was kind of a walk-on almost at Wyoming and he was the only team that really gave him a scholarship offer coming out of junior. College. So I would agree with you to that degree, but I was a young teenager during those 90s runs and lived through the suffering of four straight Super Bowl losses and the bickering bills even before that in the late 80s.

Kelly, not wanting to come here originally, but right now I would say I think the conversation, consider me old school. I think it’s Bruce Smith or OJ Simpson. You know, they both completed their careers and the full body of work is there.

Josh is obviously. Obviously still in his prime with another, let’s fingers crossed, 7 to 10 years ahead of him. I think, yeah, I mean, I think if he stays healthy and continues on his trajectory, I really do believe he’ll end up as the greatest bill of all time. That’s so that’s my take.

I think. I think Bruce is.

Mark Musumeci

We can. We can help, right? Yeah. Man, Bruce, Bruce and OJ.

I mean, yeah, I want to argue with you, but I, it’s hard to do that because that’s, I mean, Bruce Smith is and OJ legends, so.

Andrew Pace

Hey. Yeah, you know it would have been nice to see Bruce finish his career here. It kind of pained me to see him get the record with I think Washington. But yeah, you know the impact he made and the teams had the game plan.

I, he was a difference maker on defense. I don’t think we get there, four straight had he not been, you know, the anchor of that defense and obviously OJ, you know, with what he did in a 14 game season versus what these guys are doing in 17 games. Incredible. I get it.

It was more of a running, running, running. You know, offenses were more around running the football back in those days and I never seen him play, but you know, just, yeah, so those would be my two.

Mark Musumeci

Yeah. I mean, I think all three of them are up there, right? Yeah, yeah, yeah. Oh man, I need to go watch some Bruce Smith highlights after this as I’ll see when my next call is and I think I might go watch some Bruce Smith highlights and OJ, but yeah.

Andrew Pace

Yeah, I don’t think there’s a wrong answer, right? You know, but I, you know, if there was a Mount Rushmore. To. Just, I think the only thing you really need to watch is that Dennis Hopper Nike commercial, you know, with Bruce Smith is bad things, right?

I don’t know if you’ve ever seen it, but that.

Mark Musumeci

Yeah, yeah, Yep. I have, I have. It’s been, it’s been a little while, so I’ll go watch that too.

Andrew Pace

Well, Mark, thank you again for joining us and sharing your perspective. I’ve had a lot of fun doing this with you and and it’s you know it’s we’ve got a great friendship and great partnership over the years and seeing all the great things you’re doing for Volvo and. And your team, it’s been, it’s been great to watch as you know being here from Buffalo. So to our listeners, thank you for turning into another episode of ACS Portfolio Perspective.

Be sure to subscribe so you never miss future conversations with leaders across the equipment finance and recovery industry. We look forward to having you with us next time. Thank you.