GM's Saginaw Steering expands in Far East

China, Japan and Vietnam grab increasing attention from General Motors Corp.'s Delphi Saginaw Steering Systems.

Donald L. Runkle, GM vice president and Saginaw general manager, reveals details of new joint ventures recently signed in China and Japan, and tells WAW partsmaking "discussions" are under way in Vietnam as it prepares to join the ASEAN trading block where 2 million vehicles currently are sold each year.

In a 60%/40% deal -- GM owns the majority -- Saginaw teams up with Norinco China North Industries Group to create a new company, Saginaw Norinco Ling Yun Drive Shaft Ltd., at an existing Ling Yun factory in Hebei Province about an hour's drive southeast of Beijing.

The plant began making axle shafts in 1989 and produces 50,000 sets annually. It also makes constant velocity joints (CVJs). Under the joint venture, it will make Saginaw-designed front-drive shafts for cars built and sold in China.

Ling Yun already supplies CVJs to Daihatsu Tianjin and for the aftermarket. Later this year it will start shipping axle shafts to Norinco Suzuki.

The total initial investment in Saginaw Norinco is $14 million, with Saginaw putting up $9 million, says Mr. Runkle. It starts out with 150 employees, ri sing to 400 by late- 1996. Production in the early going is scheduled for 150,000 shafts on an annualized basis, rising to double that rate during the next 12 months, says Mr. Runkle.

He says the Ling Yun plant is "agile," utilizing a "one-piece flow process with single-purpose machines. There are no robots and no transfer lines, so it's easy to change" the manufacturing mix.

The Norinco deal is Delphi's fourth components venture in China, but more are coming. "I expect the next one will be completed in three to six months and it likely will be one of our products," says Mr. Runkle.

In Japan, Delphi Saginaw teams up with NSK Ltd. to market and manufacture NSK's UJT II CVJs. The deal licenses Delphi to supply the UJT II, designed and manufactured by NSK, outside Japan. NSK, meanwhile, will continue to supply CVJs to six automakers in its home market.