DETROIT - Twenty years ago, when Renault's US hopes were rising, fellow French company Plastic Omnium Industries closely examined the North American market - and decided against entering it. The timing simply was not right.
Now, however, Plastic Omnium is moving swiftly into the North American market. It supplies BMW Manufacturing Corp. and General Motors with exterior trim and plastic fuel tanks from its plant in South Carolina.
Its target list has grown to include GM, Ford and Chrysler and European automakers producing in the country.
Plastic Omnium has already booked business that will bring it annual revenues of $200 million in this market within two years, up from the current $80 million. The company plans to double its current local staff of 30 in the next two years.
Automotive News Europe ranks Plastic Omnium as the 72nd-largest original equipment supplier in the world.
It is France's fourth-largest, with 1997 revenues of $1.4 billion worldwide - $1.1 billion in autos, up nearly 15 percent from 1996 levels. It has more than 50 plants, employing more than 9,000 people, on four continents.
Aid from European allies
The 51-year-old company has become a crucial supplier and partner to European automakers in their worldwide operations. For instance, it supplies Renault plants in Europe, Asia and Africa. It supplies Volkswagen in Mexico with the front and rear fascias and fenders for the New Beetle - more than 30 percent of the entire exterior surface of the new Bug.
And abandoning decades of rivalry with Belgian plastic-tank maker Solvay, Plastic Omnium is building a huge joint-venture factory in Brazil with Solvay to supply fuel systems in the South American market to Renault, GM and Chrysler.
But to become a truly global player, Plastic Omnium's management has long understood that ultimately it needed to invade North America. Its founder, Pierre Burelle, was an engineer who sent one son each to Harvard and to Massachusetts Institute of Technology for college. With his Harvard MBA and grasp of American culture firmly under his belt, Jean Burelle is CEO of Plastic Omnium today. The Burelle family owns 52 percent of the publicly traded company.
So as the 1990s unfolded, the time was finally right for Plastic Omnium to leap into North America by leveraging partnerships the company had been forging in Europe.
BMW's initiative to manufacture Z3 roadsters and other vehicles in Spartanburg, South Carolina, opened the first door: Plastic Omnium agreed to open a plant in nearby Anderson, South Carolina. Now, the company builds fuel systems and several exterior trim components, such as bumper fascias, for BMW, and presents them at the Spartanburg plant arranged by color in the specific order in which BMW plans to produce vehicles.
Relationship with GM
Also, leveraging its strong relationship in Europe with Opel, Plastic Omnium secured some contracts to supply fuel systems to GM in the USA. So now its South Carolina plant also turns out fuel-tank systems for GM's minivan plant in Doraville, Georgia. That is Plastic Omnium's main volume program in North America so far. The company also supplies GM's Bowling Green, Kentucky, plant with the two-piece plastic fuel tanks for the Corvette, 'a highly difficult design that is a good reference to our technological performance,' says Laurent Hebenstreit, president of Plastic Omnium's fuel-systems division.
Those programs have generated enough volume to give the company an 8 percent share of the burgeoning North American plastic-tank market, together with a much smaller share of the exterior and interior components business.
Borrowing its expertise from injection-molding of body components, Plastic Omnium is researching the feasibility of producing injection-molded tanks for a market that now relies completely on blow-molded plastics.
Injection molding would let the company dramatically cut the number of openings in the tank, which is the major obstacle as engineers try to beat the continually tightening federal emissions regulations.
'Whatever the marketplace needs is the method that we'll do. Our future is in resin conversion, regardless of the method,' says Cory Ter Smitte, the company's worldwide GM account director.
Plastic Omnium is about even with Solvay for market share of plastic tanks in Europe. The region has practically abandoned metal tanks in favor of plastic over the past few years.
In North America, Hebenstreit believes that Plastic Omnium can grab a 20 percent share - up from 8 percent now - as GM, Ford and Chrysler move over almost completely from metal to plastic tanks in the next few years.