Federal-Mogul India will inaugurate its new Chennai facility by March 2012, president and managing director, Jean de Montlaur told Autocar Professional in an exclusive conversation at the Delhi Auto Expo.
While not divulging the investments that have been made, de Montlaur said the plant down south is a missing link in the company’s network that caters to its clients. Headquartered in Delhi, Federal Mogul has seven manufacturing facilities in Bangalore, Bhiwadi, Parwanoo, Patiala and Rudrapur. The Chennai facility will be its eighth.
De Montlaur says he is happy with what the company had achieved in 2011. “We have closed 2011 but the numbers have not been published either here or in the US. Our main achievement is the plant that is being set up south. It is currently being built. We will make brake friction materials and we are also moving towards copper-free products in which we are advanced.”
The president and managing director adds that with the Chennai plant, Federal-Mogul would be present in all auto hubs and it would be close to clients like Hyundai Motor India, Ashok Leyland, Ford India and Nissan. "These are customers we serve on a daily basis," he explains. "Product-wise, we will make brake pads for cars, linings for trucks and we work closely with the OEMs," he reveals.
According to de Montlaur, Federal-Mogul saw an interesting evolution in 2011 with the movement in passenger car demand from petrol to diesel. “We have had to make investments in new lines because those lines are very different from those for petrol and, moreover, we have strengths in diesel.”
For Federal-Mogul, the Chennai plant will be important for the Indian market but can potentially play a key role in Asia. Vinod Hans, director, sales – India and Thailand, says that when the Chennai plant goes online, it will fit into Federal-Mogul’s operating structure. Thailand is, at present, the base for brake friction materials but the recent floods there have resulted in a plant shutdown.
The plant supplied products to India and elsewhere in Asia. But once Chennai is ready, the company hopes it will save time as it will not have to go through the homologation process necessary for the products to be supplied here. According to Hans, the Chennai facility will be complementary to the other Asian plants.
Meanwhile, Federal-Mogul plays a key role in the aftermarket as well. Madhur Aneja, who heads the Asia-Pacific aftermarket, says the company’s strategy is to buy products from its manufacturing plants and then decide who is best placed to supply them where they are needed. “Going forward, we will look into the possibility of supplying from Chennai to other Federal Mogul plants. But for now, we will supply domestically.”
India strategy
Explaining Federal-Mogul’s strategy, de Montlaur says that the new plant will supply locally but if there is a temporary need, it will be used for export. “Our focus is local because we are customer-centric, so our plants are open for visits by OEs and the aftermarket.” Further, he says that Federal-Mogul is keen to remain single source to its customers and as a strategy is “dual source but within the group so in case of disaster as it happened in the case of Japan, we are prepared. So we build capacity in a plant either in India or some other location.”
The tsunami that hit Japan in March last year resulted in work being shifted to Thailand which months later itself was impacted by major flooding. Recalling that, de Montlaur says, “We pre-apped products in the shortest possible time but then Thailand happened. No, India was not able to contribute to either places as our plant is not ready.”
To handle the crisis that hit Thailand, Federal-Mogul was able to move the dies to other places and where they were compatible with the presses, says Hans. So while Thailand remains a hub as Federal-Mogul has four plants and while not under production, the tools are dispersed in the world and are being used.
Speaking about Federal-Mogul’s strengths, Montlaur says, “We have decided that we in India will be a solid supplier. We have the ability to respond to a demand outside. Our treaty between India and Thailand does not include brake friction products as it does say between Thailand and Malaysia.”
When the floods hit Thailand, the Federal-Mogul team hired divers who went almost three metres into the waters to retrieve the tools, then had them treated and sent to other Federal-Mogul locations.
While Federal-Mogul supplies products to cars and commercial vehicles, its aim is market leadership in both segments. Admitting that the slowdown did affect the company, Montlaur says the company is positioned in some segments of the car market and that helped Federal-Mogul shoulder the slowdown, and also the consumer and in turn the OEM shift to diesel worked to the company’s advantage as well.
On the CV front, Hans says that one-tonners are doing good business and that the company is supplying products to both the Tata Ace and Mahindra Maxximo from its Rudrapur facility, to mention a few. In M&HCVs, the company works with Tata Motors, Tata Cummins and Eicher. As the CV sector moves to Bharat Stage III and IV norms, the company says it is prepared to supply its products.
Eco-friendly display
At last fortnight’s Auto Expo, Federal-Mogul had displayed a range of products including Euro 4 and Euro 5-compliant petrol and diesel engine rings and pistons. Among them was the EcoTough-coated petrol piston which uses highly-wear resistant, low-friction skirt coating to improve fuel economy.
Also on display was its LKZ oil control ring which Federal-Mogul claims can cut oil consumption by 50 percent. There was the Eco-friction range of advanced brake friction products too including low-copper and zero-copper formulations available in non-asbestos organic and low steel matched for ABS.
On other fronts, says de Montlaur, the company is moving to lead-free bearings and also using synthetic materials that eliminate metals. In course of time, these will make their way to the Indian market. The company is also working on mono-steel for pistons and has begun to use them in Europe.
Speaking about growth drivers, Aneja says the company has been a quick adapter. “We have global platforms for vehicles and as they come to India, we are ready to supply because we do supply for that platform in some other parts of the world. We are tooled up for that.”
Another area that Federal-Mogul has adapted to is India’s requirement in products for CNG and bikes for both OEs and the aftermarket. Federal-Mogul has done the development work here which has been supported by global technical centres.
As Federal-Mogul approaches the inauguration of its Chennai unit, how has it gone about staffing it? De Montlaur says, “We have prepared ourselves. Chennai is a greenfield project and before we began two years ago, we had selected the head of human resources before work began on the plant construction. Once we got US permission but before land was purchased, we had hired the key person who has put this team together.”
“We are in the training mode and have hired operators for the first line so when the machines are here, we are ready. We have started early and that is good.”
Adds Aneja, “Our larger India presence helps and we can re-deploy our engineering talent if needed. We have set up our own model."
“Engineering-wise, we have a lot of flexibility. We only have to get deep into the institutes to hire what we need,” concludes de Montlaur.