Delphi brings Mexico to megatrends
Focusing and devoting efforts into a single activity are golden rules among global companies and Delphi Automotive admits no distractions in its quest to be the first to satisfy needs that are mostly unknown.
Delphi Automotive is clear on the road to follow after the restructuring it underwent during the second half of the last decade.
The company is now focused on humanity's present and future demands as dictated by megatrends, namely, those products that enable constant communication, ensure higher safety and independence and favor emissions reduction. Delphi Automotive, one of the heavyweights in systems and components manufacturing for the global automotive industry, has decided to meet these needs and has left behind production units that were once its source of strength but that no longer contribute to its current goals.
During the transformation and diverse challenges that the multinational faced between 2005 and 2009, when it sold divisions related to brakes, injection systems and batteries, its manufacturing and product development operations in Mexico –which the firm has had since 1978– remained stable so much so the country continues to be its leading production axis in North America.
"We are North America's manufacturing platform for Delphi. This is part of a regional service model where we produce where we sell and we sell where we produce. Out of Mexico, we service to all of our North America customers" explains Xóchitl Díaz Porras, director of corporate affairs for Delphi Mexico.
Historically, Delphi has been one of the largest private employers in Mexico. Even now, after the transformation, it has 54,000 employees working in 46 plants in 22 Mexican cities –a significant chunk for a global company with 118,000 associates.
A 35-Year Relationship
Mexico has witnessed Delphi's progress. The company established its first manufacturing facilities in the northern part of the country, when it was still an integral part of General Motors (GM), in 1978. During the 80s, the firm underwent an important growth process that boosted the opening of the Mexico Technical Center (MTC), founded in 1995 in Ciudad Juárez, Chihuahua.
"In the early 90s, when we were analyzing the possibility, we already had a very good, solid manufacturing plant that recorded extraordinary growth, and we had already proven that we could achieve our goals in Mexico," continues Xóchitl Díaz.
Later that same decade, Delphi began to take shape as a solid and independent entity of GM, an evolution that culminated between 1998 and 1999 when the firm formerly known as Delphi Automotive Systems went public. The company was splitting and emphasized development, research and design of new products for a much wider portfolio of clients in the terminal automotive industry.
The MTC in Ciudad Juárez, which was founded in 1995 and doubled in size in 1997, was already working at that juncture as a space to generate new products that attracted engineers from the region, the rest of the country and abroad. "They were willing to leave the city to move to Juárez and be part of the project," says Xóchitl Díaz.
"We worked with the Tecnológico de Monterrey (ITESM) to establish the mechatronics program giving a significant donation over a fiveyear period to create it and set up the labs," Díaz adds.
The MTC currently has 2,000 engineers and technicians from both Mexico and abroad; it favors innovation and development; it has been granted 308 patents between 1995 and 2012 and has registered 1,069 inventions in the fields of active security, mass and weight reduction in cars and user connectivity. Furthermore, the center offers product testing and calibration services for multiple industries in addition to the automotive industry and a laboratory that specializes in prototype creation.
Mexico was Delphi Automotive's closest bet to continue to satisfy industry needs during an unstable period, in both its own finances andthose of large assemblers, which matched the ups and downs of the US economy. According to Díaz, after that "a financially solid company was born, with a product portfolio that is focused on worlddemanded technologies."
Delphi supplies Daimler AG, Fiat, Ford, GM, Hyundai, Peugeot, Renault, Shanghai General Motors, Toyota and Volkswagen. Its products, such as sensors that alert drivers to random events they may encounter during the journey, are created to ensure zero accidents. The novel diesel and fuel injection systems are made to reduce the emissions load and others are designed around real time interconnection and communication needs, like the interfaces the company develops to connect cars to radars and cloud without compromising the driver's attention.
Delphi is inside cars that circulate all over the world and Mexico is part of the manufacturing process in all of its divisions. The business manufactures digital dashboard displays, receivers, sensors and the components of the power source's electronic system, GDI injectors, diesel injectors, ignition systems, engine valves, air flow valves, HVAC controls, heat exchangers, compressors, air conditioning components, electric-electronic distribution systems, connection systems and bussed electrical centers.
To achieve that, the company relies on its manufacturing units and three development centers, the largest one for Delphi, located in Ciudad Juárez, another one located in Saltillo, Coahuila, which is focused on connection systems, and another one in Querétaro, a joint venture with the cable specialist, Condumex (Grupo Carso).
"Practically 90% or 95% of what we manufacture is exported," says Díaz.
The Strong Arm in the Americas
Between 2010 and 2012, Delphi reported new contracts for 70 billion usd: 34% in Asia, 32% in Europe, 29% in North America and 5% in South America.
To meet the demand and anticipate the innovation needs of the North American market, in 2012 Delphi launched 455 products from Mexico from all its divisions combined.
During that stage, Delphi continued to expand in Mexico with four new plants established in Durango (Durango), Ciudad Victoria (Tamaulipas), Saltillo (Coahuila) and Ciudad Juárez (Chihuahua). And it will continue to expand as the company has announced it will open a new complex in Zacatecas.
"Based on what we see in terms of our bookings, it is safe to say that we are going to have a solid manufacturing base in Mexico," concludes Díaz.