WCA September 2007

From the americas

“We took the long view that by working together we could make them competitive,” Timothy Myers, a purchasing executive for Honda of America, told Forbes . And Honda’s commitment to Northwest was absolute, even to a pledge to swallow the added cost if its parts suppliers would meet the much higher price (up to $800,000 apiece) of certain Northwest dies. If Northwest should falter on delivery, Honda stood ready to help its suppliers transfer the work to other tool makers. Calling Honda ‘crazy like a fox,’ Ms Muller noted that it has always been a ‘quirky’ company driven as much by principle as by economics – and also that half of its global sales are in North America. Honda believes in building cars in the markets where they are sold, and in using locally produced tools. In the company’s view, communication among engineers is better and cheaper when the tool supplier is situated nearby, with all that that means for manufacturing efficiency and quality control. Hence Honda’s decision to rescue the ailing tool and die maker in Walker, Michigan. “If everything is sourced overseas and shows up in a crate, we haven’t really learned anything,” said Mr Myers, whose memory stretches to the 2002 port strike on the West Coast which delayed the shipment of important tools needed at a factory in Ohio for the launch of the Honda Element. For its part, Northwest had ‘a good mind-set,’ according to Mr Myers: “They knew they had to change the way they produce tools to stay in business.” In other news of Honda Motor Co, the results of this year’s J D Power and Associates customer satisfaction survey of US drivers, released on 28 th June, show the Japanese company with four models ranked at the top of their vehicle segments – more than any other auto maker. The 12 th annual survey measured ‘owner delight’ with design, content, layout, and performance of the vehicle, over the first 90 days of ownership. A global marketing information services firm with an automotive speciality, J D Power (Westlake Village, California) said its rankings in 19 segments are based on responses gathered by mail between February and May from more than 91,000 people who bought or leased new 2007 model-year vehicles. ❖ Chrysler joins forces with the Chinese auto maker Chery The prospect of Chinese-made cars in the American market has been the subject of speculation for some years. Now, Chrysler Group has concluded a deal with China’s biggest auto maker, Chery Automobile, for a production venture that could in fact see the first Chinese-made cars exported to the United States. Chrysler’s chief executive, Thomas W LaSorda, said at a 4 th July signing ceremony in Beijing that the first cars built by the alliance will reach Latin America or Eastern Europe within a year, and models might be exported to North America and Western Europe in two-and-a-half years.

Chery is a 10-year-old company based in the city of Wuhu, in eastern China. Its chief executive and chairman, Yin Tongyao, said the alliance with Chrysler would help Chery improve its skills as it expands foreign sales of its own models. Gallantly referring to his American counterpart as his teacher in the automotive business, Mr Yin said, “Chery is still young, so we should learn from Chrysler and improve our own competitive edge in the near future.” Mr LaSorda said that the first Chrysler-Chery export will be based on Chery’s A1 compact and will be sold under the Dodge brand. A 1.3-litre version of the A1 sells in China for $7,100 to $7,900. Export prices were not mentioned. Previously announced plans by others to bring Chinese- made cars into the American market have all foundered. At one time, Chery itself was in a short-lived project with the American entrepreneur Malcolm Bricklin to sell cars in the US. Asked if Chrysler were worried that its alliance with Chery might be promoting the development of a possibly threatening rival, Mr LaSorda said: “No, we’re not. With us or without us, they’re going to grow. So the question [for Chrysler] is, are you going to go with a winner?” Patent ruling against Qualcomm threatens to disrupt supply of handsets to network customers A ruling issued on 7 th June by the United States International Trade Commission (ITC) in a patent dispute could prevent importation into the US of new mobile phones containing certain semiconductors made by Qualcomm. The San Diego-based company said the ruling, if it stands, could bar tens of millions of handsets intended for the Verizon, Sprint, and AT&T wireless networks. The agency ruled that Qualcomm (San Diego) had infringed on a key patent held by another California semiconductor maker, Broadcom (Irvine), for the design of chips for advanced third-generation (3G) ‘smart’ cellphones. Broadcom had asserted that Qualcomm used power management technology proprietary to Broadcom, without paying licensing royalties. Qualcomm said that, in addition to asking the federal appeals court to stay the ruling, it planned to go straight to President George W Bush whose trade representative, Susan C Schwab, had 60 days within which to veto the ruling. The company said it sought ‘to avoid irreparable harm to US consumers’ and injury to the nation’s economy. In the meantime, with its ability to provide the next generation of handsets at stake, Qualcomm was reported to be in discussions with Broadcom for a reduction in that company’s royalty rates, which it considers prohibitive. The ITC ruling in Broadcom’s favour covers only new-model handsets. Qualcomm was permitted to continue delivering models that were on the market as of 7 th June, whether or not they incorporate the patented technology. Telecom

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Wire & Cable ASIA – September/October 2007