Hauke Jungnitz
Director General
BOS Automotive Irapuato
2
Carlos Casado
CFO
BOS Automotive Irapuato
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View from the Top

Dual Education System Proving Advantageous

Tue, 09/15/2015 - 14:19

Q: How far has BOS Automotive progressed in the expansion of its operations in Mexico?

HJ: We are in the early stages because we have not received any orders yet, but I predict this will happen in the short term. It is now a matter of getting order confirmations for product development and then we are essentially ready to go, as long as we are also price-competitive.

CC: It is interesting for people in our industry to know that BOS is working on its vertical integration and is therefore able to reduce times and become more cost competitive. These are elements we want potential clients to recognize.

Q: During your expansion process, what has been your experience with the availability of human capital in the state of Guanajuato?

HJ: Regarding the state of Guanajuato, we have had a positive experience working with the government to create certifications for our workers. For instance, our forklift drivers and welding specialists underwent a training course, at the end of which they received a state certificate of their professional qualifications in their corresponding field. Another important factor in human capital development is the dual-education system, which is common in Germany and consists of part school, part work. There are a couple of states that have pilot programs for this system, and Guanajuato is one of them. BOS is participating in this program and we have six students from the dual system in the company.

CC: Companies like us have to hire, train, and retain direct labor. At the entry levels of the company, we usually hire people with little industrial background. For higher positions the criteria are different. I see a risk in Guanajuato in terms of staff because new companies and industries are entering the state and we are all competing for the same talent. In Queretaro, the Aeronautic University specifically prepares people for companies within the aerospace cluster, and the proposed automotive univesity is expected to do the same. Guanajuato does not have something similar yet, but if they developed an equivalent, I think that would strengthen the competitive advantage of the state.

Q: What has your experience been in terms of retaining talent?

HJ: Our subsiduary has the highest turnover rate for people who have been in the company for less than six months. In recent years, our turnover for blue collar positions has been reduced. However, we see that external forces having a stronger impact this year. We have implemented measures to prevent high turnover, such as offering competitive salaries, investing in the selection and training of new people, and having the supervisors and project managers talk to employees and understand their concerns. Incidentally, absenteeism is something embedded in the Mexican law; people can be laid off after three days of not showing up. However, people can systematically miss two days of work per month and legally we cannot do anything. Once fluctuation is reduced, we can start taking more measures to retain people. A certain percentage of fluctuation is not bad because it allows us to adjust.

Q: Apart from the first company expansion, what is the next step for BOS?

CC: The industry is moving really fast in Mexico and we want to be ready for that potential growth. This will require more investments beyond our manufacturing plant in order to develop more technical capabilities that will translate into being able to produce a wider range of parts. The idea is to increase our value-added functions, for instance, engineering and designing with Mexican professionals in Mexico.

HJ: I would say that most companies entering Mexico still engineer new products in their home countries. Volkswagen has a strong engineering team here although it is still managed by Wolfsburg. Ford now demands more sourcing from Mexico. BOS has a small engineering team, but within the next two years, I expect to have a fully functioning unit in Irapuato. Maybe this division will not work on the most complex products, but it will take care of the core products made in Irapuato. A local engineering unit would be working together with our office in Rochester Hills, Michigan. Additionally, the engineering division will be close to us in case there are customer issues, which is always an advantage.