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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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(Best in France Case Study)

Group 9

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


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  • 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 l.jpg
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)



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

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 l.jpg
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 l.jpg
It employees 3,800 people in France… Engine Management Systems

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 l.jpg
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 l.jpg
Key Findings industry (cars, trucks and off-road)

  • 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 l.jpg
Key Benefits of being in France are… industry (cars, trucks and off-road)

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 l.jpg
Key Constraints of being in France are… industry (cars, trucks and off-road)

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 l.jpg
Conclusion industry (cars, trucks and off-road)

+

-

  • 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


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Study Participants industry (cars, trucks and off-road)

  • 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


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ANY industry (cars, trucks and off-road)

uestions?


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