(Best in France Case Study)
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Arnaud COMPLAINVILLE, Carolina GIRALDO, Christophe TISSOT, Nam-Jun KIM, Patrick RECASENS PowerPoint PPT Presentation


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(Best in France Case Study). Group 9. Arnaud COMPLAINVILLE, Carolina GIRALDO, Christophe TISSOT, Nam-Jun KIM, Patrick RECASENS . We Thank Mr. Dominique Chauvin, former Managing Director Mr. Jon de Gaynor, Business Line Executive Ms. Catherine Dupont, Director of Diesel Operations

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Arnaud COMPLAINVILLE, Carolina GIRALDO, Christophe TISSOT, Nam-Jun KIM, Patrick RECASENS

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Arnaud complainville carolina giraldo christophe tissot nam jun kim patrick recasens

(Best in France Case Study)

Group 9

Arnaud COMPLAINVILLE, Carolina GIRALDO, Christophe TISSOT, Nam-Jun KIM, Patrick RECASENS


Arnaud complainville carolina giraldo christophe tissot nam jun kim patrick recasens

  • We Thank

  • Mr. Dominique Chauvin, former Managing Director

  • Mr. Jon de Gaynor, Business Line Executive

  • Ms. Catherine Dupont, Director of Diesel Operations

  • Mr. Robert de Vaucorbeil, HR Director

  • Mr. Philippe Bercher, Chief Engineer - Common Rail System


Delphi is the world s largest manufacturer of automotive components

Delphi is the world’s largest manufacturer of automotive components

  • Delphi in a Nutshell

  • Spin off from GM in 1999 (IPO)

  • Services all car manufacturers in the world

    • Non GM sales = 39% (2003)

  • Company’s HQ  Troy, Michigan

  • Regional HQs (Paris, Tokyo, Sao Paulo)

  • 3 sectors :

    • Mobile electronics, Transportation components, Dynamics and propulsion

  • Worldwide manufacturing and distribution

  • Revenue : $ 28.1 bn (2003)


In 2002 delphi had a revenue of 27 4 billion worldwide

In 2002, Delphi had a revenue of $27.4 Billion worldwide


Our study is focused in delphi s engine chassis division part of the dynamics and propulsion sector

Delphi E&C Overview

E&C annual turnover = $ 9 bn

Purchased Lucas Diesel Systems from TRW in 1999 for $ 800 m

Benefited from Lucas’ expertise in diesel systems

Cost constraint : moderate

Highly automated manufacturing

Development intensive

Our study is focused in Delphi’s Engine & Chassis division,part of the Dynamics and Propulsion sector


Produces a comprehensive range of components such as diesel engine management systems

Produces a comprehensive range of components such as Diesel Engine Management Systems

Delphi E&C Product Portfolio

  • GASOLINE Engine Management System (EMS)

  • DIESEL EMS

  • BATTERIES & ADVANCED ENERGY

  • EXHAUST

  • FUEL HANDLING

  • SENSORS & ACTUATORS

  • BRAKES & MODULES

  • RIDE DYNAMICS


It employees 3 800 people in france

It employees 3,800 people in France…

Operation in France

  • 3,800 employees in France

  • 4 industrial sites (19 in Europe)

    • Blois

    • La Rochelle

    • Sarreguemines

    • Florange

  • 2 technical centers (11 in Europe)

    • Blois

    • Paris


And have a client base that is almost all of the automotive industry cars trucks and off road

And have a client base that is almost all of the automotive industry (cars, trucks and off-road)

Most of the car makers are Delphi’s customers…

… who expects Delphi to achieve the following

BMW, Caterpillar/Perkins, Cummins, Daewoo, Daimler Chrysler, Fiat, GME Powertain, Ford, GM, Honda, Hyundai/KIA, Isuzu/SIA/IBC, Mitsibushi/DSM, Nissan, PAG, PSA, Renault, Rover, Suzuki, Toyota/NUMMI, Volvo Truck, GM Tier I Customers

  • Develop most effective automobile component

  • Concurrent engineering (new models, new engines)

  • Follow European Union’s regulation (exhaust)


Key findings

Key Findings

  • Historically : followed GM’s international expansion, Purchase of Lucas Diesel

  • Today : closeness to European manufacturer, notably French

  • Long visibility since changes in the business correspond to changes in environmental regulations (6 years / 3 to 4 years for other business units)

  • Less labor intensive than other divisions

    • E&C (France) : Labor cost is around 25%

    • Harness (Portugal) : Labor cost = 70%


Key benefits of being in france are

Key Benefits of being in France are…

People Benefits

Environment Benefits

  • Skilled workforce

    • superior engineering schools;

    • academic system second to none (due to typical 5-years courses);

    • Availability of a wide-range of talents;

    • Seek to continuously improve processes and manufactured products;

    • Creates a virtuous circle whereby employees are increasingly qualified and increasingly creative.

  • Mobility

    • Have to use French expats in other countries (UK, Shanghai, Seoul)

    • Open-minded, integrate well overseas;

  • Location benefits

    • international airports in Paris

    • quality of life

    • closeness to French customers

  • Good acceptance of individual compensation systems (unlike Germany)

  • Net salaries comparable all over western Europe (excl. Portugal)


Key constraints of being in france are

Key Constraints of being in France are…

People Constraints

Environment Constraints

  • Aversion to change

  • Limited command of English

  • French managerial practices differ from the American ones (reporting, procedures, matrix organization)

  • Labor laws

    • 35h week increases hourly rate by 12%

    • Poor flexibility (cost of redundancy: payback is over 2 years)

  • Labor costs

    • Social charges at 47% are too high compared to other European countries (this is 15% too high)

    • French operators 25€/h (19€/h in the UK)


Conclusion

Conclusion

+

-

  • Main assets

    • Diesel expertise in France

    • Qualified workforce

  • Threats

    • High labor cost

    • Relocation of production in Eastern Europe (long run)

No major expansion plan, but France is well positioned to retain value added, highly automated activities


Arnaud complainville carolina giraldo christophe tissot nam jun kim patrick recasens

Study Participants

  • Arnaud Complainville, French, Doctor in biology

  • Carolina Giraldo, Colombian, Banking

  • Nam-Jun Kim, Korean, Consultant

  • Patrick Recasens, Canadian-Spanish, Attorney-at-law

  • Christophe Tissot, French, Finance director


Arnaud complainville carolina giraldo christophe tissot nam jun kim patrick recasens

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