Study Examines Foreign Auto Assemblers', Suppliers' Success In North America

Foreign automakers and suppliers that enjoy success in North America focus on five key areas, according to a recently released study. Those five areas are site selection, organizational structure, human resources, value chain and manufacturing excellence. The findings of the study were published jointly by Capgemini consulting firm and the Office for the Study of Automotive Transportation (OSAT) at the University of Michigan's Transportation Research Institute, Ann Arbor, Mich. The findings are based on interviews with nine new overseas assemblers and suppliers: Honda, Mercedes, Mitsubishi, Nissan, Toyota, Brose, Denso, Valeo and Yazaki. More than one facility per new entrant may have been studied. Among the key findings:

• New entrants do better, in general, when they begin by building established products using established manufacturing processes.
• While nearby supplier parks have advantages, they also can create issues, such as wage pressures and worker recruitment conflicts.
• The ratio of expatriate managers to local North American managers varies, yet there is usually some targeted increase in the number of local managers over time.

"The major lesson that the traditional industry should learn from the experiences of these new entrants is that the North American workforce can generate world-class results, and the best tools for accomplishing this are effective recruitment, training, and changes in managerial and company cultures," says OSAT's Maitreya Sims.