GKN China - Andrew Moss - John McLuskie - January 2015
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GKN China GKN China Andrew Moss John McLuskie January 2015
Transcript of GKN China - Andrew Moss - John McLuskie - January 2015
GKN China
GKN China
Andrew Moss
John McLuskie
January 2015
GKN China
Zhong Guo.
The Middle
Country.
The Centre
of the
World.
中国
GKN China
A long time keeping people out!
GKN China
Guanxi describes the basic dynamic in
personalized networks of influence, and is a central
idea in Chinese society. In Western media, the
pinyin romanization of this Chinese word is
becoming more widely used instead of the two
common translations—"connections" and
"relationships"—as neither of those terms
sufficiently reflects the wide cultural implications
that guanxi describes.[1]
Closely related concepts include that of ganqing, a
measure which reflects the depth of feeling within
an interpersonal relationship, renqing (人情
rénqíng), the moral obligation to maintain the
relationship, and the idea of "face" (面子, miànzi),
meaning social status, propriety, prestige, or more
realistically a combination of all three.
Guanxi has a major influence on the management
of businesses based in China, and also those
owned by overseas Chinese in Southeast Asia,
known as the bamboo network.[2
Quality
Not Quantity.
Doing business in China - Guanxi
It’s all about relationships.
GKN China
JV or WOFE – Questions to Ask.
Are we resourced to succeed on our own?
How strong is our local network?
Do we need access to existing marketing and distribution channels?
Is a suitable partner available?
Will the WOFE have the same access to government support?
Is control or risk sharing a priority?
GKN China
JV or WOFE – The GKN View
GKN’s view might be biased by the success of its JV’s
Learned a lesson from the failure of our JV in the North – Jilin.
One Flag Strategy in Driveline.
Expanded the business scope of our JV with HASCO (SAIC).
Invested in new JV for Land Systems Wheels to improve footprint
and customer base – Huading Wheels
Currently exploring market entry strategy for our Aerospace
business.
GKN China
GKN JV’s in China – Creating a Win-Win
The majority of GKN’s revenues in China originate from JV’s
Strong partners and excellent relationships
Chinese partners manage labour issues and relationship with local
authorities
GKN brings credibility with global customers and leading technology
JV’s are managed by Chinese management team, GKN supporting with
best practice processes and knowhow transfer
GKN China
GKN in China - Summary
The first Western automotive supplier to invest in China in 1988
More than 25 years experience in China with wholly owned businesses,
acquisitions and JV’s with various Chinese partners
Leading market positions in automotive, powder metallurgy, and land
systems
Committed to growth with localized product range and development
capabilities, fully integrated in GKN’s global network
Investment plans in place to significantly increase in size in the next 5
years
Exploring new partnerships in Aerospace and Land Systems
GKN China
Powder Metallurgy
GKN: leadership in four specialist, global sectors
Automotive
Land Systems Aerospace
GKN China
Changchun
Shanghai
Beijing
Chongqing
Guangzhou
Wuhan
GKN in China - 2013
GDC
Chongqing
GKN Z
Mengzhou
SDS
Changchun
Hoeganaes
Danyang
SDS (3 Plants)
Shanghai
LandSystems
Shanghai Office
TS
Shanghai
Sinter Metals
Danyang
Wheels
Liuzhou
SDS (2 Plants)
Wuhan
GKN China
Holding
Shanghai
15 plants, 6000 employees
2013 Sales £730million
Aerospace
Shanghai Office
Stromag
Taicang
Wheels
Lianyungang
Automotive
PM Land Systems
Sinter Metals
Yizheng
Aerospace
GKN China
Chinese Auto Industry
Mix of Domestic producers and Foreign implants.
Foreign implants all JV’s and restricted to maximum
50% ownership.
Chinese government trying to encourage growth of
domestic manufacturers but difficult:
• Perceived quality and kudos of implants.
• Technology advantage.
• Regulation, particularly emissions, makes it more difficult
for domestics.
Chinese government encouraging Chinese OEM’s to
think more internationally.
GKN China
UBS China Auto Industry Report July 2014.
The Chinese government has allowed foreign automakers to set up JVs in China
and to own up to a 50% stake in the hope of gaining access to technology, or
what is known as the "exchanging market for technology" policy. However, after
30 years the SOEs have not accumulated much technological knowhow due to a
lack of bargaining power and incentives, while the global auto brands have taken
70% market share and are earning more profits than their Chinese counterparts
through component sales and royalty fees.
This is a lesson that will no doubt be learned in
other markets such as aerospace.
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GKN35.42%
GKN China14.58%
HASCO 45%
BOCOM5%
Profile Established in September 1988
One of the earliest auto component
JVs in China
Leading role in China’s Auto
component industry
Business scope expanded in 2013 to
cover full GKN Driveline product range
- Torque Shanghai business merged
into SDS
HUAYU Automotive Systems Co., Ltd
GKN Driveline International GmbH
BOCOM-Bank of Communications Co. Ltd (Shanghai Branch)
Shareholders
GKN China Holding Co.,Ltd.
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SHANGHAI
SHANGHAI
YIZHENG
CHANGCHUN
WUHAN
Footprint
Headquarter Kangqiao plant
Zhoupu Plant Tech Center
Shenjiang Plant TQ
YIZHENG
Yizheng Assembly Plant
Wuhan Plant
WUHAN
Wuhan Plant II
CHANGCHUN
Changchun Plant
CHONGQING
GDC（合资JV)
CHONGQING
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审计法务室 Legal & Audit
董事总经理 薛锦达
Managing Director Xue Jinda
副总经理 顾啸峰 Deputy GM Gu Xiaofeng
副总经理 叶连祥 Deputy GM Ye Lianxiang
副总经理 –John McLuskie
Deputy GM
Management Office (MO)
赵英南 Zhao Yingnan
管理部 Management
顾正启 Gu Zhengqi
财务 Finance
部门 Functions
张蕙 Zhang Hui
人力资源 Human Resources
市场营销 Marketing & Sales
徐俭 Xu Jian
陈安 Chen An
质量管理 Quality Management
陈慈平 Chen Ciping
规划 Planning
陈祖荣 Chen Zurong
物流 / ISIT Logistics / ISIT
霍云龙 Huo Yunlong
采购 Purchasing
张正华 Zhang Zhenghua
技术中心 Technical Centre
部门 Functions
金红心 Jin Hongxin
康桥工厂 Kangqiao Plant
陆有根 Lu Yougen
周浦工厂 (申江厂) Zhoupu (Shenjiang Plant)
王一峰 Wang Yifeng
扭矩业务 Torque Business
王亚哲 Wang Yazhe
武汉工厂&二厂 Wuhan Plant &Plant II
倪永刚 Ni Yonggang
长春工厂 Changchun Plant
章磊 Zhang Lei
重庆纳铁福 GDC
工厂 Plants
SDS Org structure
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Driveline Systems
Business extension
From Driveshafts to
Driveline Systems
GKN China
球笼式固定万向节 SX
端面花键式 UF 万向节
后传动轴
电子矢量扭
矩管理器
电机驱动桥
防滑差速器
锁止差速器
电子扭矩管理器 开放式差速器 电磁控制扭矩管理器
前半轴
取力器
高速固定式万向节 高速移动万向节
二段式驱动轴
传动系统产品Driveline System
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Propshafts ( 800k pcs/yr)
CVJ Systems
Complete Range of Driveline Products
Constant velocity shafts (7.5m carsets in 2013)
Precision forgings (18m pieces in 2013)
AWD Systems
Differential Assemblies (1.2m pcs/yr)
Power Transfer Unit ( 20k sets/yr) Final Drive Unit ( 20k sets/yr) Trans Axle Solutions
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AWD Production in SDS
Engineer and supply
the full AWD system
for Chinese customer
SOP Jan, 2015
AWD PTU, RDM and Propshaft
localisation for European customer
SOP 2015
Launch of Mitsubishi
ASX PTU
Launch of GAC PTU
Launch of Ssang Yong
C200 PTU
2010 2012 2014 2015 2016
Launch of PTU and RDM for
additional European and US
customers
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Customers
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SDS Growth
Sales grew from 30mil yuan in 1989 to 6.3bil yuan in 2013
Sideshaft production increased from 2,900 c/s in1989 to over 7.5mil c/s in 2013
Propshaft production increased from 78.5k units in1989 to 721k units in 2013
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1989 1994 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F
Premium propshaft output高端虎克轴产出
Sales revenue 销售额
Sideshaft output 等速轴产出
Propshaft output 虎克产出
2013 sales
6.3 bil yuan
YOY 18%
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Technical Center
To be developed with initial R&D capability and be industry leading
Headcount: 300 (8 expats) 2018 plan
With all around functions incl. R&D, testing and validation
荣获国家高新技术企业认可 National Hi-tech Enterprise certification
获得GKN等速传动轴试验室体系认证
GKN Driveline’s Certification for Testing System
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Engineering & Test Capability
CAD&CAE: Pro-E、 Catia、 UG、Autocad 、Nastran、 Adams
Design & Analysis
Testing
NVH
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Lean Enterprise Deployment
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Recent Awards
1 2
3 4
5 6
7 8
No Awards From Who
1 2012 World
Excellence Award
FORD
2 2013 Service
Golden Award
SVW
3 2013 Best
Supplier Award
SGM
4 2013 Excellent
Supplier
GZ FIAT
5 2013 Excellent
Supplier
CMA
6 2013 Excellent
Supplier
Geely
7 2013 Excellent
Development
Award
SAIC
8 China Customer
Satisfaction
Company
China Quality Association
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秉承精益，追求卓越，
成为国际一流的传动系统供应商 We aim to be an international best-in-class driveline
company, continually improving to Excellence
GKN China
GKN Aerospace in China
GKN China
Is it happening? Aircraft orders
403 Aircraft orders placed from May to Sep 2014.
COMAC progress ARJ plan for CAAC certification by the end of 2014.
C919 Forward and Mid Fuselage delivered to
Pudong FAL.
C919 Nose section assembly arrived at Pudong
FAL.
C919 Centre Wing Box was completed.
C919 HTP assembly started.
COMAC and Russian UAC (United Aircraft
Corporation) signed a MoU to develop a Wide-Body,
Long Range aircraft.
Airbus latest Cabin completion centre for the A330 jets.
GKN China
The Market
China is one of the fastest growing aviation markets in the
world.
China Aviation Market in the next 20 years.
6,020 new A/C.
$870 billion.
17% of the world market value.
By 2033 China and North America will be the two largest
aviation markets.
GKN China
Xi told COMAC officials last month that the country must achieve the goal of creating
its own "jumbo jet" at all costs.
"The ability to develop and make a large airplane represents the strength of a
country's aviation industry," he said during a visit to the company.
"More importantly, it is a symbol of a country's overall strength and power. A large
airplane is the dream of several generations of Chinese.“
The view from the cockpit.
GKN China
GKN Aerospace China Strategy
Grow a substantial business in
China/Asia.
Low cost source.
Balanced global footprint.
Create a link to national airline
champions.
Work with a Chinese partner.
GKN China
Powder Metallurgy
• Two plants in China Jiangsu Province plus
powder mixing facility:
• Danyang – Plant Powder Facility.
• Yizheng Plant.
GKN China
Product, Customer & Plant focus
Carrier
Synchro Hubs
Conrods
VVT parts
Steering
Braking parts
Hydraulic appl
Engine and B/S
DAN
YIZ
Press
Tonnage 150T
Press
Tonnage 500T
Press
Tonnage 50T
Powder Metallurgy
GKN China Land Systems
Three plants in Liuhzou, Huading, and Taicang.
Currently supporting domestic markets but will
increasingly also support global OEM’s.
Growth strategy to take advantage of both current and
future market growth.
GKN China
Established 2006
Location Liuzhou, Guangxi
Shareholders
GKN 100%
Products
产品
Wheels for Construction, Agricultural,
Mining Machinery, Harbour Cranes,
Fork Lift Trucks, Other Special
Machinery; double universal joint for
the off highway machinery
Main Customers
主要客户
LiuGong, Rimtec, Linde, Komatsu,
John Deere, SANY, Cargotec
Rimtec、
GKN Power Solutions Liuzhou
GKN China
Established 2013
Location Lianyungang, Jiangsu
Shareholders GKN 80%
Huading Wheels 20%
Products Wheels for Agricultural Machinery, other
Special Machinery
Main Customers Shandong Changlin Deutz-Fahr, Guanzhou
Tairong, Qingtuo, Dongfeng, Xuzhou KAT
Changlin、Guanzhou Tairong, John Deere.
Lianyungang GKN Huading Wheels
GKN China
Established 2010, acquired by GKN in 2011.
Location Taicang, Jiangsu.
Shareholders
股东
GKN 100%
Products Disc Brakes for Wind Turbines and
boat lifts.
Main Customers Goldwind.
GKN Stromag Taicang
GKN China
Established 2005
Location Mengzhou, Henan
Shareholders GKN 59%,
ZYNP 41%
Products
产品
Heavy Duty Diesel Engine
Cylinder Liners
Main Customers
主要客户
Cummins, Deutz, DAF, Scania, MTU,
Caterpillar, Wuxi Diesel Engine
MTU
GKN Zhongyuan Cylinder-Liner (GKNZ)
GKN China
CSR – towards a sustainable future.
• 2012 GKN won the award for the British
Company of the Year in China.
• 2014 nominated as in the top 5 British
Companies for CSR in China.
GKN China
GKN in China – Lessons Learned
Do not underestimate cultural differences.
Differences in speed of decision making can create conflicts – both
ways!
Do not expect global standards in financial reporting/control
immediately.
Development and retention of local key talent must be a top priority.
Properly resource the growth plan.
GKN China
But … there will be surprises!
GKN China
谢谢 Thank You
