Winning the alliance game requires more than cash, a product or market match and the willingness to be a partner. Communication, establishing goals and understanding cultural differences between organizations can make or break a merger, joint venture or other partnership.
So says a group of automotive industry leaders speaking at a panel session at the Society of Automotive Engineers World Congress. Executives from Delphi Automotive Systems Corp., Dana Corp., General Motors and Microsoft Corp. saw such themes as top success factors in implementing alliances.
'The key to a successful alliance centers on how we focus our energies around integrating the organizations involved by establishing a clear purpose and common understanding of goals and objectives,' said Guy Hachey, president of Delphi's energy and chassis systems business.
Even considering the complexity and challenges involved in forging alliances, automakers and suppliers must find partners to attain industry leadership. Mergers and other partnerships are often the most efficient way to gain access to new product areas, geographic markets and customers.
'No one is big enough, smart enough and rich enough to go it alone anymore,' said David Cole, director in the Center for Automotive Research and management partner in the Environmental Research Institute of Michigan.
Dana executive William Carroll outlined benefits gained from his company's recent acquisition of a minority stake in Getrag Cie, a German maker of axles and other automotive components.
With that partnership, the Toledo, Ohio, USA, supplier gained depth in the passenger car and European markets, as well as new technology. Getrag gained depth in the truck and global markets, plus access to capital, said Carroll, president of Dana's automotive systems group. Likewise, a Drive-Tek Ltd. joint venture with GKN plc gives each added expertise in the design of advanced driveline systems.
GM has also benefited from alliance activity in recent years, said Rudolph Schlais, president of the automaker's Asian business.
He pointed to GM's partnership with Suzuki Motor Corp., which has resulted in use of Suzuki's YGM-1 small-car platform, saving GM engineering time and money by not developing its own niche product.
The new small car will go into production this September at a Suzuki plant in Japan and likely will be sold as a Chevrolet, Schlais said.
GM's equity stake in Isuzu Motors Ltd. offers another example of the economic potential for alliances.
The relationship gives GM added diesel engine expertise and allows Isuzu to better focus its limited research resources.
Isuzu's market for diesel engines, meanwhile, grows by several factors, he said.
'This is a win-win,' Schlais said.
Said GM vice president and SAE Chairman Arvin Mueller: 'The winners, the people who will still be around, will be those that have a global footprint.'