Nizar (Nick) Ghoussaini is CEO of Benteler Automotive, the largest business unit within German car parts and steel supplier Benteler AG. Benteler Automotive is a global market leader in chassis components and has 28 plants worldwide. It has annual sales of around DM3.5 billion (A1.8 billion). Ghoussaini has been CEO of Benteler Automotive since October 1999. Automotive News Europe's Edmund Chew interviewed him at the company's headquarters in Paderborn, Germany.
How is business progressing at Benteler Automotive?
Our sales have been generally strong in the past several months. The poor sales volume that we experienced in 1999 in (South American trading region) Mercosur is starting to show signs of recovery.
Which business is growing fastest?
Benteler Automotive is going through significant growth. The business unit that is showing the strongest growth is our chassis modules business.
What else is growing?
We see growth in the impact and safety business unit. This segment of the company started as high-end metal stampings. Materials, product design and process innovations have led to substantial growth in front and rear impact beams, A-, B- and C-pillars and roof frames. We envision that this product area will continue to develop as safety and weight reduction requirements become more stringent.
How are the demands of vehicle manufacturers changing?
Today, vehicle manufacturers put innovation at the top of their list of demands. They are challenging the supply base to be more innovative in the product and the process development areas to improve function and reduce cost. The target costs or prices that the OEMs are demanding cannot be achieved through the productivity improvement methods that we have grown accustomed to. These demands can only be achieved through technology and innovation. This phenomenon is forcing the supply base toward consolidation, joint ventures and alliances. We have to realign the culture of our company to be able to meet these demands.
Can you give an example?
What we are doing with some car companies is bringing them total solutions to supply axles, suspension corner modules, brakes and ride control functionality in one module. It is a step-by-step process to transform Benteler from a components supplier into a full module designer and supplier. For example, we had to develop a module that involved axles, brakes and corner units with other suppliers, put an alliance together, and deliver an integrated solution. Now, we have to manufacture it and deliver it in a cost effective fashion. That is not the end of the road. I believe our customers will demand one level higher in sophistication in this area from us.
What will that involve?
Probably active participation in the validation of ride comfort and handling as well as NVH (noise, vibration and harshness). Highly sophisticated subsystems will have to be integrated into a variety of modules that meet the new world platforms. For example, Ford platforms that could include Ford, Jaguar, Volvo, Mazda and maybe Land Rover in the future. Another example could be the new Renault/Nissan platforms. The GM connection with Fiat and DaimlerChrysler/Mitsubishi are more examples of the potential for truly global mega-platforms. We at Benteler believe that this is a new step in the globalization process.
What innovations are you working on?
We have basic research and development groups with innovation projects in three fields - materials, processes and joining methods. In the materials area, the r&d projects are aimed at high-strength/lightweight steel, aluminum, magnesium and carbon fiber/metal combinations. The process and joining r&d projects are aimed at finding efficient ways to manufacture products with these new materials.
What affects the growth rate of outsourcing?
One of the obstacles I see is that the suppliers have varying degrees of sophistication in designing and supplying a full module. I don't think many suppliers can go to the car companies and prove that they are capable of doing an entire module. Another obstacle is the investment the car companies themselves have in equipment, plants and people. But there could be an acceleration in outsourcing at any time. Now the car companies and suppliers such as Renault/ACI, Fiat/Magneti Marelli and Ford/Visteon are starting to diverge. If these in-house groups follow the trend set by Delphi, the outsourcing landscape could change fast.
How has the wave of consolidation among vehicle makers affected your business?
There are positives and negatives. Usually it brings added price pressure. However the positive is that it presents opportunities for growth. Our business is adapting, and will continue to adapt, to accommodate the consolidation. Our strategy and investment plans have to include locations and customers that were not included before.