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Education and Training in automotive component manufacturing

1. Automotive Industry is mature and has well established multinational, power relationships and
technologies.
2. Technology and innovation is needed to compete in the intensely competitive environment.
3. A survey was conducted by Gordon Institute of Business School and Lund University in
Sweden in automotive component manufacturing industry to obtain information on level of
education for training in innovation, this was to enable firms to make effective choices to attain
resources for innovation.
4. National Association of Automotive Component and Allied Manufacturers (NAACAM)
represents largest number of automotive component manufacturers with most employees in the
sector.
5. India and China according to the survey has a higher percentage of educated staff than South
Africa and so own design equipment i.e. original equipment manufacturer (OEM).
6. Survey also stated that when compared to India and China, south African manufacturers fared
worse on product innovation in products and services however, innovation levels in the three
countries are much closer together, and this can be attributed to new OEM model introduction.
7. The survey also compared training in these three countries and found out that firms in South
Africa depend more on international trainings and thus, depends on multinationals.
8. Government requirement of more competitiveness, sustainability and decreased dependency on
government incentives will need high level skills and local trainings which can only be attained
via greater education level like that followed in India and China.

Education and Training in the Auto Manufacturing Industry: a Comparative Analysis


between Japan and Malaysia.

1. Japan focuses on On-the-job training in addition to specifically designed off-job-training


education system in offices for technical staff. While in Malaysian organizations focus is
mainly on OJT techniques like coaching e.g. job rotation and self-learning. Malaysian
employees are sponsored by employers for trainings and they may switch jobs post training.
2. Look East Policy is in practice which causes Japanese education and training to be placed
in practice in Malaysian organizations, but this transfer will take some time due to cultural
differences. This is also because Japanese employees are constantly given trainings while
Malaysians are given very little training.
3. J1 Motors believes that its main resource is Human resource and so it trains and educates
it to reap better results which in turn gets the organization creativity, positive attitude and
responsible workforce. Thus, this allows the employees to improve themselves constantly,
collectively in a team like manner.
4. Malaysian employees prefer job specialization and skills which is difficult as their own
jobs do not provide them with this experimentation. They also do not expose their
knowledge which will lead them more work because they are not given more wage if they
are skilled more.
5. There is also a lack of mentorship system, so Malaysian employees mostly rely on OJT and
off-JT, but mostly they depend on Group In-House trainings.
6. According to the survey all Malaysian auto manufacturing firms contribute 1% of payroll
to Human Resource Development Fund which provides all employees equal training
opportunities. Self-learning is promoted through official certificates, full salaries on study
leaves.
7. Competitions like ‘KAIZEN Competition’ are held and 3 winning teams are sent to Japan
for presentation this is a practice in an automotive manufacturing company called MJ1
Motor Corporation.
8. Japanese auto manufacturing companies emphasize more on training as an on-going
process throughout the career of employees. This training is however, limited in Malaysia
where they are conducted annually only. Also, there is no long-term employment policy in
Malaysia and companies do not invest in these training programs. Thus, employees go for
self-development programs.
9. Malaysian auto manufacturing organizations do not focus on training due to factors like
a. Job hopping
b. Limited budget
10. Human Resource Development Fund is a positive step taken by Malaysian government to
solve this problem as well as more training institutions and electronic human resource
(HER) being set up as a solution.
11. National Labour Advisory Council has also been set up to take care of employee wages.
Thus, a lot of these changes needs to take place in Malaysian auto manufacturing
organizations for them to successfully adopt ‘’Look East’’ policy.
12. The main take away from this research is that Malaysian auto manufacturing organizations
have not designed their education and training systems and techniques after Japan and
mainly rely on OJT and lectures and case studies for off-JT.

Challenges Facing the automotive Industry


1. In the recent years there has taken place many changes globally in terms of technology,
economics, government regulations, market dynamics etc. have made this industry of
automotive parts uncertain in nature.
2. Automotive parts manufacturers are becoming more focused on consumer demands region wise
and are making investments accordingly. They are also making forecasts according to the
strongest growth regions.
3. In the coming years five challenges will be faced by car market in the year 2015 and onwards.
4. One fast emerging global giant in this industry is China where the volume and double-digit
sales growth has made the Chinese automotive market extremely competitive. In order to
compete in this market planners must make strategies to facilitate expansion and growth.
5. Risks persist as China outpaces in demand and production.
6. Challenge 1 is that posed by the Chinese market i.e. its potential opportunity and risk. If growth
is maintained in Chinese economy, it will lead to soft landing which will cause shake out in
Chinese car production to be delayed but if hard landing takes place expansion will decelerate
to 3-4% which will restructure Chinese automotive industry and this inefficiency will become
a major issue in China. This will be a critical moment for component parts manufacturers. This
is for the automotive strategists to forecast.
7. There is however, uncertainty in the long-term motorization track in China due to social reforms
like pollution policies, energy security policies etc.
8. It is expected that the Chinese government has come to a solution by introducing NEV i.e. new
energy vehicle adoption in the year 2020 to increase sustainability in Chinese demand for cars.
9. Challenge 2 is the connected car i.e. industry evolution or transformation. Non-automotive
background companies like Google with Android Auto and Apple with CarPlay are stepping
into this industry but this should not be a threat to the existing players in the industry due to
their strong foothold in the integrated supply network. Thus, it will be difficult for new entrants.
10. Connected cars is the innovation in this industry and for this workforce skills need to be
enhanced as well as experts in cloud and connected services can be hired to handle big data and
connect it digitally.
11. Connected cars is a huge leap to gaining revenue and profit long term which justifies the
investment. This new technology and business model i.e. mobility as a service, is the biggest
transformation.
12. Globally, annual vehicle sales are growing at a rate of 3.1% which is challenge 3 i.e. increasing
competition and growth in automotive industry. The main challenge is that customer needs and
wants are changing rapidly due to shift in demographics and technological innovation pace.
This needs to be done to maintain customer loyalty which is rare in this industry.
13. Car ownership amongst the millennials is decreasing due to less buying power, car sharing
concept etc. thus car manufacturers need to go extra mile to gain and retain customers today.
14. Another challenge is that of new powertrains and new regulations as there is need to balance
demands of technology and government which is all needed as the new customer wants
technological innovations incorporated in the vehicle plus, the customer and government
demand that it be environmentally friendly. An example is Renault Twizy electric quadricycle.
Worldwide light vehicle test (WLTP) is also introduced to fulfil this need.

15. Challenge 5 is that of globalization and consolidation of platforms to forming Megaplatforms


and this is applicable to Original equipment manufacturers (OEM) too. OEMs using this gain
economies of scale, reduce their costs and development time and get more flexibility.

The Future of Canadian manufacturing: Learning from leading firms

1. Magna International Inc. is a global leading auto parts design and productions company made
$ 30 billion in 2012 and it virtually counts all major auto assemblers as its customers.
2. It focuses on areas where direct labour costs are low or areas where it can offer innovative
designs and processes.
3. Its competitors are
a. Dana Holding Corp.
b. Lear Corp.
c. Johnson Controls
d. Robert Bosch Corp.
e. BorgWarner Inc.
4. Markets trends like move to global platforms making the ability to supply important, growth of
non-traditional markets; China, India, Brazil etc, demand for smaller vehicles, government
regulations, fuel efficiency, cost reduction and pricing pressures.
5. Magna is divided into 3 geographical regions and each region is led by a separate GM who
know their local customers and markets.
6. Magna plants are non-unionized and take employee responsibilities in their own hands like
Magna Employee Charter provides job security, healthy workplace environment, competitive
wages and profit participation. Its business model is decentralized.
7. Magna believes that management is responsible for solving labour issues and its strategies are
word class manufacturing, Innovation and leadership development.
8. Magna also focuses on trade policy, duplication of regulations, exchange rate and training.
9. Its sales are business to business and is seeking to be a leading supplier to all major assemblers
and views Russia and India as new markets to gain market shares.
10. It has 17000 employees and half of these are international.
11. Linamar is a global manufacturer of precision metal parts competing with Magna International
and is given contract without price competition if product is unique to Linamar. It uses
continues innovation to remain competitive and its business focus is precision machining.
12. It has 2 major manufacturing divisions i.e. Powerline and Driveline Division and Industrial,
Commercial and Energy Division. Its strategy is to run efficient plants in clusters which are
autonomous in nature.
13. Employees are trained, and Linamar is non-unionized. Technical skills, leadership skills and
management skills. Business model is decentralized for each plant and separate facilities for
employee.
14. Its growth strategy includes diversification, globalization and green technologies in addition to
growing its auto parts business.
15. It has two R&D facilities Guelph and Detroit where all employees are encouraged to suggest
innovation each year. It is a B2B supplier providing to firms, parts.
16. Martinrea International is a global supplier of auto parts in 3 areas;
a. Metal stamping & forming
b. Fluid handling systems
c. Complex Aluminium parts
17. It provides one stop shopping service for assembler clients and its business strategy is buy or
build to gain competitive edge and follows the same decentralized management system as
followed by Magna and Linamar.
18. It focuses on innovation by empowering employees to improve processes and reduce costs and
it follows B2B marketing.
19. Its labour is a mix of unionized and non-unionized, but it has an employee charter same as
Magna. Martinrea looks for employees with strong work ethics, diligence and who want to
learn.
20. All 3 of these firms want a flat structure and focus on innovation with high quality and low cost
however, they differ in sizes i.e. Magna at $30 billion is 10 times that of the other two and they
differ in their geographic representations.

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