Long Distance Dedication - Potential profits outweigh challenges for globalsuppliers

Greg Gilbert, vice president of engineering at damper supplier Simpson Industries Inc., has a warning for U.S. suppliers who link up with an overseas partner to become global.

Keep in mind, he says, that your new mate is used to doing things a certain way, may struggle with the loss of independence and may embrace a different engineering philosophy, not to mention the barriers of culture and language.

"When you don't fully disrobe until the marriage is on, that's when you find the warts and the things you didn't expect," Mr. Gilbert colorfully explains.

He admits a few warts arose when Plymouth, MI-based Simpson, which had focused primarily on North America, purchased part of Holset Engineering Ltd. of Great Britain and overnight gained access to Europe, South America and Asia-Pacific.

Simpson had to win the confidence of the engineers in Europe, where the emphasis is on the best engineering instead of the lowest price. The new relationship also forced a greater self-examination.

"As we expanded our knowledge of ourselves, we discovered we had warts also," Mr. Gilbert says. "We weren't as smart as we thought we were."

But warts can be treated. Simpson's remedy comes in forming "best-practice teams" to look over each operation, deciding which has the best method of doing something, and making it standard.

Warts can be eliminated by the mere promise of steadily growing business with customers who demand quality around the world. Keep your eye on that ball, and the pieces will fall together.

That seems to be the lesson learned by many suppliers exploring new worlds. Suppliers say the key in a new land is patience.

"Once you understand the people and their way of thinking, it's easier to accomplish what you want," says Hugo Ferreira, vice president of engine products at Dana Corp., with operations in 30 countries.

Attitude will get you everything, including access to bright minds who could make or break your operation.

Dana hires regional employees and brings them to the United States for training before sending them back to the new facility. Meanwhile, Dana employees who will transfer to the new site are immersed in an equally thorough training about the nation's culture and language.

"We've failed sometimes," Mr. Ferreira says. "The best success stories have been with young management people who are more flexible to learn a different language."

As for foreign suppliers coming to the United States, the hiring and training process is much the same.

Japanese-based Sumitomo Electric Automotive Inc. recently opened a North American headquarters in Plymouth Township, MI. Like other companies taking advantage of communications advances, Sumitomo relies on e-mail, video conferencing and satellite links with other technical centers around the world.

But nothing replaces face-to-face contact. That means travel, and lots of it. Robert Oswald, as chairman, president and CEO of Robert Bosch Corp., is on the road more than asphalt. Last year, he logged 243 days of business travel.

"Most of it is rewarding, but anyone who says there isn't a personal cost hasn't done it," he says. "If you start traveling 200, 250 days a year, it wears on you. You don't sleep as well, you don't sleep as much."

But sleepless nights won't slow the global trend. Mr. Oswald says the days of purely regional Tier 1 suppliers are over, as falling tariffs make it easier to do business across borders.

Mr. Oswald points to Bosch's current antilock brake system as a successful global product. Engineers in Germany, Japan and the U.S. developed it to meet the demands of all markets. Today, it is produced in four continents roughly the same way.

But not all of Bosch's global endeavors have been successful. Several years ago, the company tried to market a European antilock system for air brake vehicles in North America. U.S. trucking companies didn't want the system because it wouldn't allow a tractor to be mated with a trailer that didn't have ABS. The moral: Know your market.

Ken Myers, general manager of roof systems-Americas for Meritor Automotive, knows automotive markets are diverse.

"Asians want one product to fit a broad range of applications. Americans are more interested in appearance, function, styling and economies of scale. Europeans want much more to be first to offer something new," he says.

Every engineer can learn something from a foreign counterpart. When Porsche Engineering Services Inc. set up shop in Troy, MI, in 1991, the lesson for arriving German engineers was about teamwork.

"I find American members are very open to the team approach, but in Germany the team approach hasnot the same tradition," says Chief Engineer August Hofbauer. "This has changed. The Japanese showed us how only a strong team, and not only individuals, can make the job."