The view from Visteon's European ops.
Visteon (www.visteon.com) is currently going through a fairly uncomfortable time in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , and is causing, for some, quite a bit of heartache and distress. In Europe, though, where it is not hindered with the same problems, things look far more upbeat. This year, for example, the European and South African operations, which for some accounting reason are grouped together, will account for 43% of Visteon's turnover, thereby overtaking o·ver·take
tr.v. o·ver·took , o·ver·tak·en , o·ver·tak·ing, o·ver·takes
a. To catch up with; draw even or level with.
b. To pass after catching up with.
2. North America, which will see its share drop from 63% to 39%, albeit on a much reduced figure, down $7 billion from last year's $18.8 billion to a projected $11.4 billion in 2005.
Asked whether the rationalization rationalization, in psychology: see defense mechanism. process in the industry, including Visteon, has come to an end or whether there will be another period of change coming up, Dr. Heinz Pfannschmidt, Visteon executive vice president and president of Europe and South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , replies: "If we do it in the traditional way, just pressuring on pricing and squeezing the supply base, it doesn't work out anymore. So there is certainly some limitation, otherwise the lemon will be very dry, but amazingly enough, if we do it in a more intelligent way, there are always means for efficiency improvements and rationalization. Some of that is associated with what we are doing here in Kerpen, Germany, with the test facility, our new wind tunnel wind tunnel, apparatus for studying the interaction between a solid body and an airstream. A wind tunnel simulates the conditions of an aircraft in flight by causing a high-speed stream of air to flow past a model of the aircraft (or part of an aircraft) being tested. and the associated computer simulation. We gather a great deal of information from testing in the wind tunnel that we can use to refine the simulation models. You can save plenty of money and have a very stable concept, deleting the trail and error stages, if you have very intelligent simulation tools in the very early stages of engineering when the concept is being conceived.
"Another hobbyhorse I have is re-use and carryover carryover n. in taxation accounting, using a tax year's deductions, business losses or credits to apply to the following year's tax return to reduce the tax liability. (See: carryback) ," continues Pfannschmidt. "Why is it that Toyota, which is making plenty of money, has carryover rates of over 60% and some European carmakers have carryover rates of less than 20%, or between 20-30%? The answer is very simple. There's a great deal of discipline in Toyota's engineering process. If they have a proven solution, they just take it over between platforms and also within platforms from generation to generation. The whole engineering mentality is about taking generic solutions and putting them together."
Another element is taking waste out of all interfaces in the very broad sense says Pfannschmidt. "It could be the interface between us and the carmaker. For example, if you work on a joint CAE/CFD-based digital mock-up mock·up also mock-up
1. A usually full-sized scale model of a structure, used for demonstration, study, or testing.
2. A layout of printed matter. model, you can eliminate a great deal of waste." It even comes down to mundane (jargon) mundane - Someone outside some group that is implicit from the context, such as the computer industry or science fiction fandom. The implication is that those in the group are special and those outside are just ordinary. items like screws and brackets brackets: see punctuation. , says Pfannschmidt. "If you look into the design of a car, it's still mind-boggling to me how complex the process is and how assembling some of the parts just isn't thought through. It might be different bolts or brackets or maybe engine variants where all the tubes are changed. Taking waste out of these kinds of value chains has a real savings potential. It is what I mean by taking intelligent waste out and further improving the efficiency where there is still some room for improvement."
Turning to more strategic matters, Pfannschmidt is very upbeat about prospects in eastern and central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. . Russia, for example, already accounts for the giant's share with around a million vehicles a year, but with Turkey included, the region accounts for around 1.5-million cars annually. "This will grow to 2.5 million by the end of this decade and to around four million in 2015," forecasts Pfannschmidt. "Turkey will also play a major role because there is a big labor Big labor (sometimes capitalized as Big Labor) is a term used to describe large organized labor unions, particularly in the United States.
The term is almost always used in a negative or derisive sense; union members are almost never likely to say that they are proud force and there are cost advantages. It will account for around a million of this four million in 10 years' time, while some countries like Rumania and possibly Poland are also likely to play a role as well."
The real high growth area, though, is China and although it does not come under Pfannschmidt's remit To transmit or send. To relinquish or surrender, such as in the case of a fine, punishment, or sentence.
An individual, for example, might remit money to pay bills.
TO REMIT. To annul a fine or forfeiture.
2. , he takes a great deal of interest in what is happening there and believes that the country is set for some dramatic changes in the next couple of years. However, warning signs are coming through that the market is now flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. out a bit after its steep growth phase which could lead to an over-capacity situation. "I think it is fascinating to see what is happening there," says Pfannschmidt. "They could either go for very aggressive export using their capacity, or the market might even consolidate or collapse a little bit. I know that many of my colleagues are speculating about what is going to happen, but I don't honestly know."
Pfannschmidt sees the Korean automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. as a template for the Chinese. "I use South Korea as an example of what is happening because I think the Chinese are currently in the middle of that process. In the beginning the Koreans had a very aggressive plan. They had Daewoo, Hyundai, Kia and SsangYong while even Samsung decided to go into auto making. They all thought they would have a bright future with the government forecasting that between them they would be building two and a half million cars a year in the country, largely for export." However, as Pfannschmidt points out, it all started to unravel with the economic crisis towards the end of the last decade having a devastating dev·as·tate
tr.v. dev·as·tat·ed, dev·as·tat·ing, dev·as·tates
1. To lay waste; destroy.
2. To overwhelm; confound; stun: was devastated by the rude remark. effect on Korean industry.
"Daewoo had after a couple of very successful years but then suffered a downturn with cash running out and the company almost broken before it was picked up by General Motors. Kia was also in financial trouble and ended up being taken over by Hyundai. Samsung decided to concentrate on electronics and sold its auto making business to Nissan while SsangYong was sold to Shanghai Automotive. The only survivor as an independent Korean carmaker is Hyundai-Kia. What they are doing now after that consolidation phase is moving out of Korea in their plan to conquer the world. This means that their investment program is now largely outside the country and so they are building transplants in North America, the Slovak Republic in Europe and Turkey. I am certain they will conquer both the American and European markets through these transplants.
"If we look at China we find that its industry is still fragmented with too many small players, so my personal belief is that the Chinese industry still has to go through a consolidation process which is why I give Korea as an example. One or two national champions will consequently emerge which will have to go into the other markets of the world. In Europe, for example, it would seem that they will target eastern Europe Eastern Europe
The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. as it is still growing and looking for Looking for
In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. cost-competitive cars before coming to western Europe Western Europe
The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). ." He then points out that a factor in this evolution is that with local people employed in transplants, the benefits of low cost manufacturing no longer come into play. "In the case of the Koreans," says Pfannschmidt, "they are no longer employing Koreans but local people, so the benefits of low cost manufacturing are no longer there."
Asked about what impact this has on a company like Visteon, Pfannschmidt replies: "A practical example of our strategy can be seen by what we are doing in the Slovak Republic. We were already investigating build a plant in the country to service the Toyota/PSA Peugeot Citroen factory and had undertaken some site surveys before Hyundai-Kia made its announcement. We didn't want to be in two or three places and so decided on Nitra, a location midway between the Toyota/PSA plant and the site for the new Kia factory." This plant is designed to become an important base for the production of plastics components for interior and climate control products to supply car manufacturers located in eastern Europe. However, we had some convincing to do with the Koreans because they wanted to have us sitting on their campus. We had to explain to them that we would lose the economies of scale if we did this so they ultimately agreed to being supplied by a central plant that serviced them, PSA/Toyota and a Volkswagen plant in Bratislava."
However, in mid-August, Visteon announced that it was building another plant in the country, this time with its Korean affiliate Halla Climate Control, to supply climate control systems exclusively to Kia. "This new business award for Kia Motors “Kia” redirects here. For other uses, see KIA.
Kia Motors is South Korea's 2nd largest automobile manufacturer with headquarters in Yangjae-dong, Seocho-gu, Seoul, South Korea. Its CEO is Chung Eui-sun. The American arm is Kia Motors America. is testimony of Visteon's growing relationship with Hyundai-Kia Automotive Group, Visteon's second largest customer worldwide," says Pfannschmidt. "This facility will exclusively focus on supplying the Kia program. We are tailoring our manufacturing, quality and supply chain processes around the individual requirements of our OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers. Our customer focus is the reason we call our just-in-time plants focused factories."
By William Kimberley, Editor
Automotive Engineer Noun 1. automotive engineer - an engineer concerned with the design and construction of automobiles
applied scientist, engineer, technologist - a person who uses scientific knowledge to solve practical problems , London, firstname.lastname@example.org