Cars—whether in the background or foreground—have always figured in the life of Adam Jonas. He grew up in Canton, Ohio (where roller bearings and steel are made), then headed even closer to the Motor City as a student at the University of Michigan, where he earned his Bachelor’s degree in business administration. After graduation, he landed an investment banking position at Dean Witter in Chicago, covering industrials and…the auto industry.
But it wasn’t until Dean Witter merged with Morgan Stanley and he was added to the voicemail distribution list of Wall Street legend Stephen Girsky that cars became his calling. “He was the number one auto analyst for 16 years in a row,” Jonas says. “The first time I heard his voicemail, I said, ‘I have to do this.’ And I wanted international experience.”
Jonas took a position as a researcher at a competitor in Europe, then returned to Morgan Stanley in 1999, en route to becoming its Lead European Auto Analyst, eventually returning to New York to run the firm’s global auto research team. Today, Jonas is a Managing Director who leads Global Auto & Shared Mobility Research, covering the auto industry and leading the firm’s cross-sector efforts on the space industry from his office in Times Square, where the hubcaps that hang over his desk remind him of both where he came from and what’s still left to discover on the road ahead. Jonas shares his insights on The New Space Economy in this Morgan Stanley Minute.
While it might not be the biggest sector of the stock market in valuation terms, it's critical to the global economy. The auto industry was on the cutting edge of technology a hundred years ago. Then it kind of lost its way, and now it's at the heart of it again.
And then there's the design and the romance of it. I'm not a gearhead, I don't collect cars. But I do love the artistry and the passion. When you meet the management teams and the engineers and the line workers in a car factory in Germany or Japan, you see real passion. And, finally, if you study the auto industry, you learn so much about the manufacturing world, from supply and demand of labor to political game theory to family dynasties, which still control many of the companies, to technology, to labor relations.
You say challenging; I think it's fun and variable. The skill set required to be a successful car company is really in flux. What used to be the proprietary design of exploding a petrochemical in a cylinder is now software, so it's inviting an entirely different genre of companies into the auto industry. If I’m going to cover the auto industry properly, I have to collaborate with my research colleagues in tech hardware, internet, electric utilities—and even study it from the perspective of the intelligence community, because the technologies involved in auto-making now have dual-purpose military capability: artificial intelligence, robotics, animation.
There is no typical day. But at the core of all of them is some amount of time spent on both idea-generation and relationship-building. Those are the two grains of sand that become pearls in our business. And, yes, there's a portion of what we do during the day that’s not devoted to either, because it’s a necessary building block, but it’s important to focus on those two things. That may occasionally require turning off my screens and telling my assistant, “I am going to be in the zone for two hours”—spending time just reading, thinking or brainstorming with the team.
They bubble up from different sources, maybe from a conversation with a CEO or a policymaker, maybe when I make presentation to a board or talk to one or more Morgan Stanley business heads, or to a client. It could be a client that’s not an automotive client. It could be someone at a tech firm or a real estate client. While Morgan Stanley is not the only firm in the world where you can have that combination of conversations, we're one of the few that is super-focused on collaboration. It's the Morgan Stanley platform to create a network of stars that we can then connect into constellations. There’s always some way where we can either be uploading our experience or downloading other people's experiences. And, of course, we produce leading research. We try to tie all those things together.
I'm able to try new things, to find ways to help other teams think outside the box. This kind of “make your own job description”—that's really given me an edge. Do it and we'll see what works and what doesn't, and we'll guide you.
I think the single most important thing I'd point to now, in that regard, is our work on the space economy—which I actually think may one day eclipse our automotive work in its importance to the firm. We recently published a piece called “Investment Implications of the Final Frontier,” and we followed it up with a Space Summit. We had about a dozen private space companies attend, along with about 120 clients. This is just one example of what Research management allowed, and the culture of the firm allowed, to go out and cover an industry that doesn't really exist yet—from a public investment standpoint, anyway—and then to see real impact. That's really fun and very inspiring. And that’s the power of innovative research.