BUNDY IS THE fluid carrying business of the UK-based TI Group. Bundy had automotive sales of just over $1 billion last year, and in March it announced the $350 million purchase of S&H Fabricating & Engineering, the US market-leading manufacturer of powertrain fluid handling systems. Chief Executive John Langston was interviewed by Edmund Chew.
Is Bundy still in an acquisitive mood?
We're in a strong position. Bundy typically looks to outperform the market with double-digit growth. We've just purchased S&H (and) we're always looking for acquisition opportunities, providing they offer good value for money and allow us to globalize the technology.
What benefits do global cars offer?
If you went back 10 years you'd have seen many contracts around the 250,000 mark. Increasingly the annual contracts are for one million units. We get the benefit of volume, they get the benefit of standardization, supplier reduction and a significant saving in terms of development costs.
What initiatives are you undertaking at the moment?
We have a very good initiative called common-sense manufacturing and administration. It's all about driving out cost and moving towards a leaner operation. We've had some very significant improvements: a 32 percent reduction in inventory days, a 90 percent reduction in work in progress, and a 23 percent improvement in sales per square meter.
We've also had a very big drive on advance quality planning. This is making sure that you have the right processes so any new program launch is successful.
We have used it on the A-class and the GM Astra. We launched something like 56 new programs globally last year, and this year we'll be launching 30-40.
Is there still room for expansion on the systems side?
Bundy has roughly a 20 percent market share, so there's still a lot of headroom. Our S&H acquisition is a perfect fit for the Bundy group. They have a leadership position in North America, where you have 95 percent fitment rates. Elsewhere, the air conditioning fitment rates are much lower, so there's a lot of opportunity.
What advances are you working on?
We are doing more and more work on noise, vibration and harshness. As they have improved the sound deadening in cars, you are getting more noise coming through the braking system, particularly on ABS. We've got a Titeflex product which helps to dampen some of the noise, and we've also developed a high-pressure brake quick connect. That is exciting because it will improve assembly.
What about the future of the fluid-handling market?
I would see the fluid-handling market near $5.6 billion in around five years. Each of the addressable markets seems to keep growing. When you go in there you get extra complexity and opportunities that come through due to technology developments or because of legislation.
How are you developing the business?
We look for a combination of technology, acquisitions and strategic alliances. We have a very important hose alliance with Freudenburg in Germany, where we're looking to incorporate Freudenburg hose and the Bundy brake lines to offer a ready-fitted brake line with a hose that we can supply track-side to the OEM. That's a development that we're pretty excited about.