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East joins West to attract new business - Management Q & A - Roger W. Cape of Lamb Technicon Machining Systems - Interview

Automotive Industries, Oct, 2002 by Brent Haight

In late-August, Lamb Technicon and Yasunaga Carp. annaunced an international alliance that combines North American process- and systems-engineering expertise with Japanese-style machine tool technology. The two companies agreed to work together an business opportunities primarily with Japanese "transplant manufacturers" in order to gain business in markets that were unreachable to each company an its own.

Automotive Industries sat dawn with Roger W. Cape, vice president of business development at Warren, Ml-based Lamb Technicon Machining Systems to discuss details af the alliance and what it means to Lamb, Yasunaga and future relafianships with Japanese automakers.

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Q. What prompted the alliance between Lamb Technicon and Yasunaga Corp?

A. "We found that Japanese transplant manufacturers insist on buying Japanese-style equipment, which is typically smaller, lighter and has a smaller footprint, Japanese equipment is built completely different than the specs that the big three demand. Our engineers at Lamb have been trained to make machines for the big three. My feeling was that if we could structure an alliance agreement with a Japanese company it would be a win-win opportunity for both of us.

Q. Have you won new business as a result of the agreement?

A. "There are currently three global engine programs, with quantities well in excess of 1 million engines for each program. In each one of these cases, the engine is going to be manufactured in more than one country. But it will be the same engine on a series of platforms. Before the alliance with Yasunaga, Lamb Technicon was not on any of the bid lists for these programs. Immediately following the alliance, we are on all of the bid lists and we have an excellent opportunity to win a good amount of that business. And that was the reason for the alliance.

"The implemental business could not be gotten by one of us without the other. Yasunaga was not set up to be able to service the Japanese transplants in the United States, They did not have an organization here, they had no capability to install machines. And Lamb didn't have Japanese style machines, which is what the Japanese transplants are looking for.

Q. Will both companies maintain their own identities under the alliance? How will new business be divided between them?

A." It's important to note that this is not a joint venture. We have a whole system worked out addressing issues like who takes the bid. It's not a prime and sub. We very carefully said that this is an alliance, so that basically if a bid comes out of Japan, there is a 99 percent chance that Yasunaga will take it. If it comes from the US., there is 99 percent chance that we will take the bid. If it comes from Europe, we will take it. Without one another, none of this would have even been possible, so really, we have nothing to lose.

Q. Were additional investments necessary from either party?

A. "We didn't have to make any additional investments. We didn't have to change anything that we are doing, We don't have to expand our facilities and neither does Yasunaga, All that is required from both companies is education. We are sending a team of engineers to Japan to learn their machine design and they are sending engineers here to learn our processing. Not so that we can take over designing machines, or so they can take over doing the processing, but rather so that when we give them a process, they will have engineers in Japan that understand what we are saying, When they give us a machine design, we will have engineers in the U.S. that will understand exactly how to build those machines."

Q. As the automobile industry becomes more and more of a global market, in your opinion how much potential business is there from "transplant manufacturers?"

A. "There are currently between six and 10 Asian design, complete small engine lines. One of the programs we bid on, for example, is the Daimler-Chrysler/Mitsubishi program. They are going to hove plants in Japan. Korea and the United States, each making the same engine. Thanks to the alliance with Yasunaga, we are in a position to win some of that business.

"We made a forecast based on what we saw happening in the marketplace about 4 years ago. We forecast that more and more of these engine programs will be 750,000+ engines per year. Every program we are bidding on now is for over 1 million engines. We think that somewhere between 35 and 40 percent of the engines in the next five years will be for quantities greater than 1 million. That doesn't mean they will all be mode in one factory. In fact thanks to the globalization of the automotive Industry, engine factories have become 300,000 unit facilities. With Yasunaga, we have positioned ourselves very uniquely in that we can now deliver Japanese style equipment in Europe, North America, Japan and Korea."

Roger W. Cope is the vice president of business development at Warren, MI-based Lamb Technicon Machining Systems. Lamb recently announced an alliance with Yasunaga Corp. that combines North American process- and systems-engineering expertise with Japanesestyle machine tool technology.

Automotive Industry

East joins West to attract new business - Management Q & A - Roger W. Cape of Lamb Technicon Machining Systems - Interview

Automotive Industries, Oct, 2002 by Brent Haight

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