Allan Welsh is chief executive of TI Group Automotive Systems. As a major Tier 1 supplier based in the UK, but with plants in many different countries, TI is well placed to judge if Britain's continuing reluctance to join Euroland is harming its industrial competitiveness. He spoke about this, and other issues affecting the supplier business, to Automotive News Europe correspondent Ian Morton.
How seriously have you gone into online purchasing?
Anything online is clearly fashionable in the automotive industry. We have several things under way. Our customers are increasingly pulling us through their e-procurement programs, and we are enthusiastically joining in. We see no significant threat, because e-procurement will take a lot of cost out of the supply chain for us, our partners and our customers.
How much will you save?
It is too early to say, but it will certainly be significant. For our part we are pushing this hard to our customers and are setting up a group-wide e-procurement program. It will be fully up and running by the end of the half-year.
To what extent is the UK's absence from the Eurozone affecting your business?
Frankly the euro never appears as a big issue in our business. We report in pound sterling, and we expect to be dealing in sterling for the foreseeable future. The UK cannot magically go into the euro. Clearly we have the majority of our European business already operating in euros, but UK purchases in sterling present no more of a mechanical problem than the dozens of other currencies in which we deal around the world.
You recently made some major acquisitions. Has the group acquisition program finished?
I would never use the word 'finished', but we have certainly got plenty to go on with the acquisitions of the last two years, notably S&H, Walbro and Marwal. These really have provided a great step forward in the systems offering to our customers and we are very enthusiastic about proceeding with their full integration into the TI Group.
We moved very quickly to merge management teams and this integration was completed within two months. What we have been doing since then has been to move on from the overall structure to the working effect as a global company, instilling TI disciplines into the companies we have acquired. For example, global project management strategies are weak in Walbro.
We have also set up new group engineering and technology teams.
What sort of developments are they working on in the short term?
New and sophisticated systems are needed to meet the LEV 11 requirements from the Californian Air Resources Board.
For example, we have already developed a range of coatings to reduce permeation, corrosion and abrasion in fuel lines. Through our acquisitions we are able to offer complete storage and delivery systems, which are at the leading edge of the market when it comes to tighter emissions control.
And beyond that?
It will take some time for alternative fuels to be widely introduced. LPG perhaps will emerge in five to ten years, with the fuel cell and hydrogen longer-term possibilities.