Noble’s Global Playbook

Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – Companies looking to go global perhaps should look to Noble International Ltd.

Two years ago, Warren, MI-based Noble was generating $300 million in revenue supplying mostly North American auto makers.

Today, Noble is a $1.4 billion company with 25 plants in a dozen countries.

The supplier uses lasers to weld steel blanks for auto bodies, a process that allows the body parts to have varying degrees of thickness as well as different alloys.

In one light-truck application, using the laser process enabled Noble to eliminate 60 lbs. (27 kg) of steel from one body side while reducing the number of components 80%, thus saving $25 per vehicle.

The end result is a lighter, more fuel-efficient car at a lower cost.

Noble CEO Thomas Saeli tells attendees at the Management Briefing Seminars here the company began ramping up its globalization efforts in 2005. Citing a J.D. Power and Associates forecast, Saeli says global vehicle production will increase from 70 million units today to 109 million units in 2022.

Much of that growth will occur in Asia, with output increasing from 22% to 38% in the same time period, the forecast says. By contrast, North American production only will increase 1.5% by 2022.

Saeli estimates laser-welded blank applications, if used to their full potential in North America, will generate only $2 billion in total revenue, while the rest of the world will account for $7 billion.

However, Saeli says Noble has developed a measured strategy and will not leverage its strong balance sheet merely for the sake of expanding operations.

“In today’s automotive climate, it is important to have a strong balance sheet to protect against the downturns,” he says.

One way to go global is to partner with other companies, a strategy that has worked well for Noble, Saeli says.

The supplier recently created a 50/50 joint venture in Mexico with Sumitomo Corp. and also partnered with the Wuhan Iron and Steel Co. in China in December 2006. WISCO is China’s third-largest steel producer and has strong customer and government connections. Another critical component: WISCO has the steel.

“China is not like the U.S., where we have the steel reselling agreements,” Saeli says. “It is very important to have the steel supply there.”

A third partnership will be consummated this fall with the world’s largest steel company, Arcelor Mittal. Noble is acquiring its laser welded blanks business, while Mittal retains a 40% ownership in Noble.

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