May 1, 2012: James Kamsickas, CEO of the IAC Group
The global CEO of the IAC Group speaks about how suppliers can succeed in a market that has swung decisively towards Asia-Pacific.
As the automotive sector shifts to the East, what in your view are the challenges that suppliers face, in general, as they tread new territory?
Raising the capital required to continue investment in the region will be an ongoing challenge for most suppliers. However, a bigger challenge for many will be establishing the necessary regional engineering resources which are part of a much larger internal global engineering network of an organisation. It is critical to be able to offer OEM customers in all regions of the world the necessary manufacturing, delivery, design and engineering solutions that stem from an established, experienced global supply organisation, such as IAC, in order to adequately support domestic and global programmes in those regions.
In an interview to an US auto website some time ago, you had suggested that the auto industry needs to stick to basics and focus on invested capital. Could you elaborate?
These comments were made at the time when the industry was recovering from the global economic crisis of 2008, 2009 and 2010. However, the same rules apply today, i.e. stick to the basics and be excellent in the implementation of these basics. More capital is available and production volumes are increasing in most regions so the need to invest capital in growth has returned. However, companies who survived the deep recession will be much more careful and strategic about how and where they invest.
You have also said that investments must be allocated across growth regions. Apart from Asia, which are the regions you refer to?
The ASEAN region is a new growth region for IAC. However, we will continue growing our business throughout Asia. Likewise, Europe and North America will require continued strategic investment in support of our customers’ continued needs. For example, in Bals, Romania IAC is completing a new greenfield plant in support of European and global customers such as Ford Motor Company. In the US, we added two new plants in Belvidere, Illinois, in support of Chrysler’s launch of new and refreshed models.
What must, in your view, US-based suppliers do to enhance their business in Asia-Pacific given that competition here is intense as more companies target this region?
Again, providing on-site technical and engineering expertise that is integrated into the company’s global engineering network is the key to success in emerging markets. Before IAC ever built a plant in India, we first established our regional Engineering and Technical centre at Pune. Local engineering coupled with world-class manufacturing practices that stem from more than a century of vehicle interiors expertise has helped us to meet the requirements of our customers in key growth regions, such as India.
How must companies like yours respond to one of the major uncertainties of the future . . . rising inputs costs?
For most global suppliers who have been facing the issue of rising material costs for so many years, it is not a matter of how we respond to those uncertainties. It is more a matter of knowing they exist and that they are cyclical in nature and so we must manage our business with our customers to the extent that we can, to mitigate these costs.
You have made an acquisition in India with the buyout of Multivac but in a larger context, how must one handle the challenge of human resources as staffing is a major challenge in India now?
As a group, we strive to earn the reputation as Employer of Choice in all the regions where we operate. There is no question that recruiting and retaining the best employees in India’s rapidly-growing northern automotive region is no easy challenge. Aside from the basic employment criteria, such as competitive wage and benefits, IAC has built a corporate culture around the employee. The company fosters an environment in which employees are challenged to rise to their full potential and empowered to make a difference in their daily work. We encourage overseas assignments which include bringing our Asian employees to the North American region and vice-versa. IAC places equal importance on the human aspect of employment. For example, the company supports and encourages employees to be involved in the local communities where we work, which reinforces the work-life balance. In the end, IAC recognises the need to continue evolving the changing needs of the workforce in order to attract and retain the best individuals.
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