Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – TI Automotive Inc. is a global company of the new kind, privately owned, and peopled and organized as if the Earth were a single country.

London’s Oaktree Capital Management and New York’s Duquesne Capital Management have owned TI Automotive 50-50 since last year. Headquarters are in Warren, MI, with branches in Germany and England.

Half the revenues come from Europe and 20% are derived from the Asia/Pacific region. TI supplies parts for 65% of the 70 million cars made in the world each year.

Bill Kozyra, an American, took the job of CEO in late May, and in late July he moved one of the company’s market-leading businesses, the Global Fluid Carrying Systems division, from Warren to Heidelberg, Germany.

The advantages of being a private company, he says, is the ability to plan long-term and act fast. The transfer to Germany was not something in the works before he arrived but a decision he made during his first two months on the job.

“It was high time we shifted focus and resources where we can best gain on the growth areas,” says Kozyra, who previously headed up North America for Continental AG’s automotive operations.

He gave the Fluid Carrying division to Joachim Burkhardt, who had been in charge of it in Europe, because the U.S. business was losing money, and he admired the German management.

The Fuel Systems division, which ranks No.3 globally for plastic fuel tanks, remains headquartered in the U.S., but 24% of the U.S. salaried workforce has been dropped, and those who remain are in the midst of reorganizing the operations.

“We’re faced with a growing need for change because of substantial OEM volume reductions and a major shift to smaller, more fuel-efficient vehicles,” Kozyra said at the time the staff cuts were announced. He expects TI to return to profitability in the first half of next year as managers commonize some activities.

He now says the company will invest $40 million a year in restructuring and $120 million a year in facilities and aims at a growth rate of 15% or more annually over the next several years.

Kozyra, addressing the Management Briefing Seminars here, says he has visited about 30 of the 103 TI plants around the world that bring revenues of $3 billion annually. He is proud of the fact Chinese executives run the 12 plants in China and Koreans oversee the seven plants in South Korea.

“I’ve found the French OEMs like to be called on by French engineers, and Germans like to be called on by Germans,” Kozyra says.

But while local operations belong to local people, in his view, he says TI people from anywhere will have equal opportunity move up to corporate jobs. At Continental, a much larger German company, Kozyra says he felt he had hit a management ceiling as an American.

TI Automotive makes money everywhere but North America, where it generates 25% of its sales, Kozyra says.

Top customers include General Motors Corp., Volkswagen AG, Chrysler LLC, Toyota Motor Corp. and Nissan Motor Co. Ltd./Renault SA. The biggest customer, which Kozyra doesn’t identify, accounts for 18% of revenues.

“OEMs will continue their ‘build where we sell philosophy,’” he says. “Only a truly global supplier will survive. Being close to them is an advantage for us.”

Although TI Automotive is a new kind of supplier in many ways, it is in the mainstream in its commitment to research and development.

“You have to keep your eye on innovation,” Kozyra says. “It is the key to the auto industry and supplier success. With the pressure on raw materials, the only way we can compete is with new technology that is lighter, less expensive and more effective for our customers.”

TI has developed a plastic fuel tank with ventilation tubing inside, referred to as the “ship in a bottle,” that is on the BMW 3-Series sold in California.

It entered the plastic fuel tank sector by way of a 1999 acquisition of Walbro Corp. of Auburn Hills, MI.

TI now is making reinforced tanks for hybrid fuel systems that are under more pressure to limit expansion and contraction because of reduced packaging space. It has developed a piezo fuel-level sensor for that project that works fine on all fuel tanks, at less cost than a traditional float and with no moving parts.

TI has plastic fuel-filler necks from Europe it is pushing in North America as a cheaper and lighter solution than steel, and it has developed multi-layer nylon fuel lines for low-cost cars.

Kozyra says suppliers like TI must “take what you are good at and expand them as far as you can.”