Master of its domains.

Thierry Morin, chairman and CEO of Valeo, said during a presentation at the 60th International Motor Show (IAA) for Passenger cars in Frankfurt, that there are four success factors for supplier companies: (1) a global position; (2) cost competitiveness; (3) quality; (4) differentiating technology.

The first three, he suggests, are the fundamental requirements for market entry. So in Valeo's case, there are facilities in 25 countries. To help with cost competitiveness, they're significantly reducing their supply base, going to fewer than 3,000. As for quality, Morin cites awards from the likes of Toyota, Honda and Nissan (and realize that he's speaking in Germany, so it is evident that he thinks that those names are synonymous with "quality" even in Europe). As for the last, he thinks that it is the real reason why Valeo (and presumably other companies) can succeed. In 2002, the company's sales were 9.8 billion euros; R&D spending was 577 million euros, or 5.9% of sales.

Valeo's further working to enhance its position as a supplier by creating an organizational structure that it is describing as the "domain approach." There are five:

1. Electrical Energy Management. This focuses on such things as alternators, batteries, architectures, converters, pumps, compressors, etc.

2. Seeing & Being Seen. Lighting systems, switches and detection systems, and wiper systems.

3. Thermal Systems. From engine cooling to cabin heating and air conditioning.

4. Vehicle Access & Security. Not only does this domain include such things as keyless entry and starting systems, but also motors and actuators for such things as windows and seats.

5. Driveline Systems. The focus here is on transmission and clutch systems.

The objective is to have people work crossfunctionally both within and across domains if necessary. For example, Valeo offers a belt-driven starter-alternator. Which means that when a vehicle comes to a complete halt, the engine is turned off. Which could mean that there is no cabin cooling. So, by having people from both Electrical Energy Management and Thermal Systems working together, they've developed what's called the "Stop-Stay-Cool," which employs an evaporator system that stores cold energy during normal engine operation; this is then released into the ventilation system when the air conditioning compressor is shut off during engine stop.--GSV