The loss of U.S. manufacturing jobs has become politically contentious, but automotive engineers are equally nervous that their jobs are bound to move offshore as well.
In Kokomo, IN, whereCorp. has headquarters and a technical center for its Electronics & Safety division (formerly Delco Electronics), engineers were apprehensive in 2000 when the company opened its Software Technical Center in Bangalore, India.
The level of concern heightened two years later whenannounced it would triple the size of the Bangalore facility. The initial plan in 2000 called for 250 staffers at Bangalore — today, it employs 400, mostly engineers.
Jeffrey Owens, president of Delphi Electronics & Safety, says Kokomo engineers frequently ask about job security as Delphi steps up sourcing from Bangalore.
Owens makes no guarantees, telling employees Delphi must position itself to respond to regional trends in a global industry.
“We will have a resource base where the growth will be,” Owens tells Ward's. “Asia/Pacific is an exploding market — Korea, China, there are many bright spots. India is not far behind.”
Delphi must have engineering, manufacturing and purchasing resources devoted to all of these emerging markets, he says. Even with its 2,000 engineers, Owens says Kokomo cannot adequately serve Asia/Pacific. “We've learned painfully in the past, if you try to do it all here (in Kokomo), we will fall far short of our customers' expectations.”
Delphi set up the Bangalore facility to handle software coding and verification for electronic controllers for some of its key products in the areas of braking, powertrain and entertainment. Engineers at the facility write, test and validate tens of thousands of lines of software code annually.
Delphi says the Bangalore center is slated to become a global center of expertise for software coding and verification. Engineers there attempt to write software as “building blocks” that can be reused easily anywhere in the world, even across product lines, to save development costs.
Bangalore joins Delphi regional technical centers in Japan, South Korea and Singapore. Most of the engineering at the Bangalore facility is for Asian auto makers, but the center also serves the North American and European markets as well.
Although emerging markets are embracing global auto industry growth, those regions will continue to rely on facilities such as Kokomo to bolster their “domain knowledge,” which lags the mature markets.
“Go to Krakow, Poland, and elsewhere, and it's hard to set up domain knowledge,” Owens says. “In India, not a lot of people have vehicles. How do you know cars if you don't have cars?”
China is rapidly ramping up its knowledge of automotive electronics, which is a new phenomenon.
As recently as five years ago, Owens says Chinese cars lacked radios, electronic instrument clusters and electronically controlled engines and transmissions. “Now, I can't add capacity fast enough,” he says. “I will sell close to a million engine controllers this year for the domestic market in China.”
Initially, the Bangalore center was handling “basic engineering” and now is moving up the ladder in capability. Achieving its full potential is a “long-term investment” that likely will take 10 years, Owens says.
Out of sheer necessity, Delphi will ply Kokomo's “deepest expertise” around the globe.
“As I tell people in Kokomo, if a portion of engineering is commodity-based, if it can be done anywhere, it probably will be done anywhere,” Owens says. “If a portion of it has to be next to the customer, it will be next to the customer. You can't argue with the customer in how they will develop their product.”
There is no substitute, he says, for having a strong local presence, regardless of the market. For many years, Delphi had little success cracking the European automotive electronics sector, Owens says. Delphi's acquisition in November 2003 of Grundig Car InterMedia Systems GmbH made a big difference.
“As soon as we made that acquisition, we had credibility, manufacturing and engineering, primarily in automotive electronics,” he says.
Kokomo will continue to be Delphi's source for “higher engineering” in the area of electronics, which includes writing algorithms and creating electronic architectures, Owens says.
True, the Bangalore facility is growing, but Kokomo engineers should not perceive that as a threat to their jobs, he says. “We've added software jobs in Kokomo.”
Cultural issues are not easily overcome, but Bangalore staffers have been sent to Kokomo for training and vice versa. The bonds have grown stronger, however, as both facilities work together.
Owens refers to one program that encountered difficulties in the U.S. late in the day as a deadline was fast approaching. Bangalore staffers 10 time-zones away worked on it through the night and had new software code ready for the U.S. engineers to show their anxious customer first thing in the morning. Owens calls it “follow the sun” engineering.
“With development cycles like this, that team has bonded forever,” he says.
The Asian market is growing so rapidly that Delphi's facilities — as well as those of many other automotive companies — for now are dedicated to the local markets. Significant exporting of engineering services from Bangalore to Kokomo is not a priority, Owens says.
“We love the North American market, and it will continue to be a huge market,” he says. “But when growth occurs at its current rate in Asia/Pacific — and Latin American growth is outstanding, too — you've got to get resources there. Everyone understands that in every place we work and in Kokomo.”