Ex-AvtoVAZ CEO Bo Andersson is reborn as a supplier

Ex-AvtoVAZ CEO Bo Andersson is reborn as a supplier

Bo Andersson’s current mission: Fix Yazaki’s “underperforming” operations in North America and Europe by finding inefficiencies, firing managers and looking for plants to get rid of.

DETROIT — He was the tough guy ticking off suppliers as head of General Motors’ global purchasing operations in the decade leading up to the crash. Then he was the tough guy breaking eggs as president of Russia’s bloated Soviet-era AvtoVAZ auto company.

Now Bo Andersson has been dispatched by the president of Japan’s giant family-owned wiring supplier, Yazaki Corp., to fix the business where it needs it most — Europe and North America.

And not surprisingly, he’s fully prepared to step on toes again to get it done.

“I’ve known Shinji Yazaki for 30 years and respect him a lot,” Andersson, 62, said of the company’s president. “But he has a huge problem — the company has been underperforming for a long time.

“We’re a private company and we don’t disclose our numbers,” he added, “but it’s very clear that we’re below average.”

Given the twin title of president of Yazaki Europe and North & Central America, Anderson’s mission is to make Yazaki more profitable, more efficient and more streamlined.

That will be a handful. His two territories consist of 139,000 employees and 75 factories spread across 18 countries, which deliver $ 8 billion of Yazaki’s $ 15.6 billion in global sales.

At the same time, Yazaki is under pressure to make its age-old core products — wire harnesses — smaller, lighter and more sophisticated with more connectors to handle more electronic vehicle functions. And Andersson is under pressure to improve their cost and quality.

He took over the European operations last summer and then was given the added responsibility for North America in March. But Andersson already is doing what he is famous for: calling out inefficiencies, dismissing underperforming managers and looking for plants to get rid of.

In his first eight weeks on the job, he has challenged his North American team to do what he already did in Europe: free up 40 percent of all plant space. He has asked engineers to find new ways to automate whatever they can within the extremely labor-intensive art of assembling wire harnesses. He has created a new logistics command post in Nashville, Tennessee, to figure out more efficient ways to move materials and finished products around North and Central America, and to find new business opportunities. And he has cast a cold eye on the sprawling operations he inherited in Mexico — 44 factories that were built over the years by four companies, some of which still have different cultures and manufacturing processes.

Andersson’s plan is to standardize everything under his watch, from Texas to Tunisia, with the same production processes, the same launch practices and the same quality standards.

“First we look at the managers to see if they are good people leaders,” Andersson, a former officer with Swedish special forces, said of his plans during a recent visit to Automotive News Europe sister publication Automotive News in Detroit. “If you have a plant with 5,000 people and you don’t like people, you’re the wrong man in the wrong job. So we’re changing some of the management.”

His target? Andersson says Yazaki’s North American operations are too far off world-class standards when it comes to zero-defect production, and the company’s track record on product launches needs serious attention.

He began closing plants in Europe during his first nine months on the job. How many might he close in North America, he was asked after his first two months?

“In Europe I had nine months,” he said. “I could do more damage, but I’ve only had two months [in North America].”

Long pause

Shinji Yazaki thought twice about hiring him.

The two men have known each other since the late 1980s, when Andersson was a young purchasing executive at Saab Automobile in Sweden. Yazaki supplied a sophisticated and expensive instrument cluster, and Andersson has been a fan ever since.

Andersson wasn’t seeking a job last year, but happened to be in Japan on business. The Yazaki executive invited him to discuss the leadership role in Europe.

“I asked him, ‘Are you sure?’ And he said he wasn’t,” Andersson recalled.

“So I said, ‘You should go think about it some more. Because hiring someone like me, you get a lot of stuff you like, but you also get some stuff you don’t like.”

Many would agree.

Andersson has not shied away from making enemies in his career. On taking control of AvtoVAZ, a complex Russian bureaucracy that is owned partly by Renault and partly by a consortium of powerful Russian interests, the executive did the unthinkable — he laid off 26,000 of the struggling automaker’s 70,000 employees. He fired managers, infuriated labor bosses, cut salaries, changed longstanding suppliers, changed work rules and even tangled with Vladimir Putin. Despite his efforts to modernize, Andersson ultimately was blamed for the company’s mounting losses and dismissed in 2016.

The story has been widely reported in the U.S. and Russia, where a newspaper referred to him as “the foreigner with no friends.” But Andersson himself will say nothing of his AvtoVAZ chapter today. When asked whether he will provide details of his dealings there, he simply says, “No.”

He also left a scorched path behind him when he departed GM’s purchasing offices in 2007. Andersson was tasked with trying to bolster GM’s collapsing world financial picture during that decade by demanding price cuts from the automaker’s parts suppliers. Since parts purchasing accounts for an enormous amount of any automaker’s annual spend, GM counted on Andersson to reduce parts spending by $ 2 billion a year.

John Henke, a supplier industry consultant who has been measuring automakers’ relationships with their supply chains since the 1990s, maintains that Andersson was personally to blame for the poor relations that GM had with parts and technology suppliers during that time. Henke believes that the resulting supplier animosity actually hurt GM financially during that period, as disgruntled parts companies avoided sharing new innovations with the company.

“I’m sure I made mistakes in purchasing,” Andersson acknowledged. “But I tried to be fair and make sure we had the right performance.”

Karma

Now he is on the other side of the line. Yazaki is a key supplier to both GM and to AvtoVAZ.

“I’m in the third period of my life,” he said. “I was an officer, and then I was an OEM, and now I’m a supplier. And I like being a supplier.”

But he says Yazaki simply has no time to waste in improving its operations. He is making sure every plant under his scope is operating in line with the Toyota Production System — a widespread business model that seeks out wasteful practices, eliminates inefficiencies and operates with minimal inventories.

He pursued the same strategy in Russia. He retained the services Hajime Ohba, the North American Toyota executive who spent a large part of his career teaching auto companies how to operate under the Toyota system. Andersson brought Ohba to Moscow two days a month to train Russian managers.

Andersson can get prickly when it comes to wasteful factory behavior.

He recently met with an executive of a European automaker customer to chide him on what the automaker was asking Yazaki to do.

“You’ve asked us to do a wire harness that is 8 meters long,” Andersson recounted of the exchange. “You asked us to check 10 different things on this harness, and then to fold it eight times and put it in a box that’s like a pizza box. I’m not going to run your business or tell you how to package your cars. But I can tell you that I take a photo of each wiring harness before I fold it and put it in the box. So if you have a problem in the plant, I will bring the photo to you.

“He didn’t really like that comment,” Andersson admits.

His forte

He makes it clear he is going to leave customer relations to other people, focusing instead on Yazaki’s factories.

Like the military officer he once was, he intends to improve the system by drilling and practicing Yazaki’s employees and managers, as well as its supply chain. Prior to a launch, the plants will begin building “dummy” harnesses — practice products that will be destroyed afterwards, but they will give the plants and their supply chains expertise in the work before a customer is scheduled to receive anything.

It could cost $ 50,000 a day per plant. He is OK with that.

“This is what has fascinated me most in automotive as a former officer — that it’s all about discipline. If you start slow, high volume won’t be an issue. But if you order your equipment late, if you don’t train people, if you don’t hire them, then the start of production is a disaster. You can easily throw away $ 20 million.”

He has implemented a nightly 6 p.m. phone call with managers to go over each day’s manufacturing statistics. How much rework had to be done? How much premium freight costs were incurred because of supply chain hiccups?

Some of those managers have a cloudy future.

“I like results,” he explained. “And I like being a supplier.” 

You can reach Lindsay Chappell at lchappell@crain.com.


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