Laurent Bresson took over as president of electric power steering supplier, Nexteer Automotive, last month following his predecessor, Bob Remenar’s decison to step down. Previously, Bresson was SVP and COO senior vice president and chief operating officer. He talked to Simon Warburton from his Paris office about the new role, Chinese owners and about Nexteer’s plans for rapid global expansion.
In March 2011, Bresson became vice president, global sales and marketing and European region director. Bresson helped expand Nexteer’s customer base to more than 60 automotive manufacturers around the world. In addition, he has extensive international operational experience overseeing production facilities and the launch of high-volume, global customer programmes.
Go deeper with GlobalData
j-a: Were you surprised by the speed at which you became president following Bob Remenar’s sudden departure?
LB: “I would say yes and no it was a surprise, in terms that I have been really preparing for the past few years. I have been taking more and more responsibility.
“I was already in charge of 50% of the company, so it has been a small transition. The only surprise was so quick – surprise – yes and no about Bob. Platinum Equity tried to acquire Nexteer in 2008 and they have always been very close to Bob and now he is working as CEO of Platinum.
“He [Remenar] wanted to make sure Nexteer would be stable financially and with an extremely stable owner, which is the case now. For him, it was the right timing to take this other opportunity.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataj-a: How will Remenar staying on board work in practice?
LB: “He is going to remain on the board of directors…providing some advice – he is a non-executive. Several companies do that to ensure continuity.”
j-a: Will your new role mean any change in the relationship with Nexteer’s Chinese owners?
LB: “The relationship with the Chinese is they are the shareholders and from that standpoint, the level of involvement is not on operations of the company, but on functioning and strategy in terms of growth and expectations of performance.
“If you look now, it is more than 18 months since the company was purchased by PCM and there is not a single Chinese person in the leadership of Nexteer. They want to make sure their investments are performing well, which is why we have quarterly reviews.”
j-a: Are there many cultural challenges to overcome with Chinese owners?
LB: “There are some cultural gaps, but this is really for me, I see it like a super-intense and exciting experience because that is a reflection of what is happening [in the] world.
“Also, [there is] a French guy leading this company – just on my staff we have American, Mexican, Canadian and other nationalities all around the globe. I really see that as an upside. Of course, there are some gaps in terms of culture, but what is good is it actually forces both sides to take the best from other regions of the world.”
j-a: Do OEMs view Nexteer any differently with Chinese owners?
LB: “The OEMs see us as a global company with a global owner. PCM is financially stable and there are no links to any OEM as we used to have with GM. This means we can pursue business with many types of OEM.”
j-a: How much business do you have now in China?
LB: “The China business in terms of revenue is roughly 10%-12% of global revenue – our goal is to be four times bigger by 2020 and we are so far achieving that rate.
“One reason is all the OEMs are growing in China, so we see that rate of production increasing. In China, there is a very large conversion of hydraulic to electric power steering. This is generating significant volume and revenue. The fact we have Chinese ownership enables us to attract business with some domestic orientation as well as looking to export.
j-a: How realistic are your ambitious growth targets?
LB: “On a global basis, double by 2020, [this] of course is due to the fact we have significant new business. Today we are US$2.1bn and from 14 months, we are already over-achieving. Over the past 30 months we have been awarded more than $12bn worth of bookings…to make it simple we are growing at a rate to double the size of Nexteer.”
“On a global basis the goal is to double the size of Nexteer by the end of the decade. There is a lot of global conversion from hybrid to electric.”
j-a: How will you be able to attract the best-skilled staff to cope with such an expansion?
LB: “Everybody is competitive to have the best engineers and so it is a challenge especially in the US, where the economy is catching up a bit. Everybody is looking at software engineers because in IT we have more and more features with lectronics.
“We have a plan to retain talent and introduce others. With the growth we are enjoying this year, launching 45 new projects, we need engineers and we have hired during the past 18 months, 250 engineers.
“However, we are still looking to additional talents in the areas of electronics and software. Of course in Michigan, but also on a global basis. We have increased significantly the number of engineers in China.”
j-a: Can you marry personnel additions with efficiency?
LB: “Our workforce is around 10,000 people – there is going to be significant increase in recruitment but also increasing productivity. I am positive this can be [achieved] and it has to be [achieved] as we have to work on lowering the break-even point, in particular where the volume is not there, for example in Europe, where we are facing a 25% volume reduction. So there is no way we can have more people without increasing productivity per person.”
j-a: Europe is proving especially problematic for so many manufacturers – how do you and your customers see its immediate future?
LB: “Frankly, I listen to my customers. They are not sure we have reached the bottom and they expect a very long, painful and slow recovery over many years. That is why we are looking at downsizing and reducing the capacity in Europe – it will vary from one customer to the next – for some it will be significant.”
j-a: How would you characterise your situation with Nexteer unions?
LB: “Industrial relations are really critical around the globe and we have very close relationships with our unions and it is my priority to keep that at the same time as keeping the competitiveness of the company. That is the key to survive. I think the unions recognise the challenges in Europe.”
j-a: How do you see your technologies, including steer-by-wire, evolving?
LB: “EPS [electric power steering] is always evolving, such as lane-keeping for example. We are talking a lot about the steer-by-wire technology – but that is many years away – the potential is unclear about what could happen. [But] if the cost is high, the end user will be unwilling to pay for it.
“The other thing is the psychological impact that should not be under-estimated because people might see it as unreliable. Short and medium-term, steer-by-wire will not bring us revenue, but longer-term I think it is going to come.”
j-a: Can Nexteer remain flexible to different market needs even if it increases so much in size?
LB: “It is a fine balance between what you want to have with scale and volume, but at the same time there are some specifications such as bumpy roads in Brazil that need different tuning compared to European requirements.
“Maybe, with the increased use of software, we are able to deliver different calibration to different needs. [For example] You push the ‘city power’ [button] and you get lighter steering for low-speed which is easier to park in town. Then, for motorways the steering is a little higher, so this is what the software is enabling.”
j-a: Will the customer assume all this technology comes at too high a price?
LB: “At the end of the day, we have to provide affordable technology and steering is a safety-related product.
“The day you think you are competitive and you don’t need to get any more competitive, I think you are done in the automotive world. We keep developing low-cost concepts.”
