interview with magna.docx

1、interview with magnaChina has most competitive cost base for Magna From www.G February 25, 2007 Fred Kao Vice President of Magna International China.Just prior to assuming his current position, Mr. Kao had been responsible for establishing the Magna Closures operations in China. This included the es

2、tablishment of the China sourcing office and the China manufacturing operations.Reporting to the President of Magna International, Mark Hogan, Mr. Kaos responsibilities include strategic oversight of Magnas operations for the Region.His prior experience in the automotive industry includes management

3、 responsibilities with General Motors from 1984 to 1989. With General Motors, Mr. Kao held positions in engineering, quality control and production. Keith Lomason Executive Director of Magna International China.In February 2004, Keith Lomason was appointed Executive Director, Magna International, Ch

4、ina. Keiths direct experience with China dates back to the early 1980s, when he was trained as a Chinese Linguist by the US Marine Corps, and had an opportunity to visit the mainland during a 2 year tour of duty in Okinawa, Japan. After an honorable discharge from the Marines in 1985, Keith joined h

5、is family run automotive business, Douglas and Lomason Company, where he held positions in Employee Involvement, Production, Material Control, and Factory Management. In 1993, he visited China on a fact-finding mission, and subsequently was assigned to perform the partner selection and contract nego

6、tiations for the formation of a 50/50 Sino-US joint venture founded in February 1996. Keith was appointed President of, and managed for 8 years, Shanghai Lomason Automotive, specializing in manufacturing seat frames for the domestic market. Magna International acquired all of Douglas and Lomason Com

7、pany in late 1996, including the 50% ownership of Shanghai Lomason Automotive, and the JV subsequently became one of Intier Automotives operations. During his 10+ years in China, Keith has been active with many different business and trade organizations, including various Chambers of Commerce, and i

8、s currently serving a term as a Chairman of the Board for the Shanghai American School.The Second Edition of Series of Interview with MNC Auto Parts SuppliersGasgoo: ok, thanks for your time to accept the interview from G. The first question is, as we all know, Magna is a giant in automotive parts i

9、ndustry, would you please tell me about Magnas performance in 2006, especially in China?Fred Kao: Weve had a very strong successful year. I think many of our products have been launched here in China. As a very diversified company weve now be able to bring all of our products into China to manufactu

10、re and to support local industry here. Like for example, mirror System, its a major player for all of our customers. Our closure products are very strong for domestic as well as export parts market, seating, interiors, our stamping in body structural system group, power train as well as full vehicle

11、 engineering group. So I think that is a really good indication of how weve done here. In the sense of all of groups and all of products line have become very active here.Keith lomason: As you know Magna structured into as actually a collection of ten groups that specialized in different components

12、of the car. And it turn to sever actively here producing parts, the other three groups are specialized in convertible rooftop systems , electronics and exterior components are all in the very active investigation stage that help us into the market here.Gasgoo: Magna is a very special supplier, becau

13、se complete vehicle assembly account for more than 30% of your total sales. It seems that Magna have more competitive even than some of the OEMs. So what are the key points that make Magna get success in this business?Fred Kao: Magna has a long history in this business and its very cultivated. I thi

14、nk we could consider it to be four main pillars or special uniques of our company. I think one of the first one that make us successful is the fact that we are much diversified company. We are able to produce a wide range of products as youve mentioned, from small part all the way to the complete ve

15、hicle. I think the other one we also really emphasize is the fact that you know we are company that has included company culture in charter talks about emphasize on innovation we believe that to be successful in this industry we need to have good products, the right products and right price. Its a f

16、ound saying to us. So innovation is the key to us. And the third one that is very key to us is our cooperative culture. We are very decentralized company that fosters a culture of entrepreneurlism or like a businessman with themselves. This allows us to make quick decisions and make decisions that a

17、re good for the company. And this is we have many people who are all quota owners of the company. I think thats important in this unique culture.The lastly of course is the fact that as any large supplier, we have a global footprint that helps us to support us around the whole world in North America

18、, South America, and Europe and now in Asia. I think those four areas are key to make us successful.Gasgoo: Ok, Its very interesting. You can build a car. Why not you enter into this industry; you can become a carmaker because you have capability to assembly complete vehicles.Keith lomason: we certa

19、inly do and we have a lot of capabilities based on the long history of building vehicles and that give us a unique perspective. You know assembling vehicles is more than just putting components together. Assembly, we can do it well anyway. The background for Magna Steyr and other Magna groups are su

20、ch at engineering resources and design manufacturing processes. Its very complete, all the way through to after assembling, doing vehicle testing, and components test throughout the process. So its very involved processes that required lot of capital, a lot of know-how and not very many competitors

21、are able or already to do that. The reason that we do not become an OEM is that our business is really built being a supplier, we look at the assembly vehicle has been the ultimate system. Its closer to the customer than tire1 until tire 0.5. We dont want to go this competition without any of our cu

22、stomers. That was A OEM would do.Gasgoo: But its also a potential risk for the complete vehicle assembly business for instance, its gone be if the model assembly is not so popular ,maybe its stagnated for sells, so what is the perspective as assembly industry and continue to increase share of Magana

23、?Keith lomason: I think there are several reasons why any OEMs would look at Magana as a potential assembler and for the reasons may be changing or reducing some of our customers. Its a period of growing with others. The customer situation, the global sale situation, regional sale situation all has

24、an impact on that. As far as if a platform we are building has for sales we suffer, yes that is the risk. that we take with our customer. But Magna is also one of the most active and aggressive suppliers when they come actually going to the OEM final customers, the car buyer and finding out what the

25、y what. A lot of innovation that Magna has been able to provide to its customers especially in NA & Europe have been based on our research with the retail buyers. And through that we have a good idea for what we sell or do well, we try and choose our partners wisely in that respect, but also help th

26、em understand what their customer want. So we may hopefully supply that engineering products of vehicles. Thats well.Gasgoo: Magna released a solid 2005 financial report. It is unbelievable that Magna keep on sales growth rate at more than 18%, while its key OEM clients market share declined dramati

27、cally, which means Magna gain more shares from its US based competitors. Could yo share with us what is Magnas successful secret? Is it cost, especially labour cost or quality? Technology, service or anythingelse?Keith lomason: You just answered the question. As Fred pointed out early, the diversifi

28、cation, the innovation, the unique culture that we have, and our global presence that all contribute to our ability to satisfy our customers needs. China represents a unique model that most platforms are producing we consider a nitch volume and the rest of the world, so is changing the period having

29、 to change the way to our customers we do business. But being a very entrepreneur company we are exceeding it so far.Gasgoo: Its no doubt that china is the most rapid growing automotive market all around the world. But for automotive parts market, Japan is currently double than China. Actually, comp

30、are only 1 facility in Japan, now Magna has almost 20 facilities in China, Does it mean for Magna China market is more attrctive than Japan? For a foreign supplier, what are the main differences between the two markets?Fred Kao: I think that is not to say which is more or less important, but I think

31、 from our perspective we view the whole Asian market as a very quickly grow market. There are very different characteristics in which definitely currently right now in Japan where we have our facility that mainly for engineering. Definitely the lever of innovation, technology is a little more advanc

32、ed in Japan right now still. In China it is rapidly growing. But on the other hand when they come into manufacturing are lust for some very unique key process not be manufacturing in China, can be only be done like in Japan or Korea something like that. China has a much more competitive cost base for the manufacturing, so we look at its different reasons for why as to decide what we are going to put in Japan, what we are going to do here in China and so on, but definitely from a manufacturing perspective, China is going to play a more and more important role as years go on, and that wil