Taking Advantage of the Demand UpturnBy Alejandro Enríquez | Sun, 12/29/2019 - 05:00
Q: What role does San Luis Potosi play in GMD Stamping’s (GMD) global operations?
A: GMD established in San Luis Potosi due to its strong ties with Faurecia and our corporate objective to increase GMD’s presence in North America. Traditionally, we did not have a presence in Mexico, the US or Canada. This is the first plant in North America and it was established with the goal of growing the business in the region, starting in Mexico. Our first priority is to serve Faurecia and the next stage of our development plan will be to focus on the OEMs in San Luis Potosi and Mexico.
Our offering for OEMs will be based on body and chassis components, which will differ from our traditional focus on seating components. The latter involves a certain level of complexity because they are safety components and must follow many norms regarding crash tests and resistance. Seat components are also high-tonnage components. Before the end of the year, we will acquire two stamping machines of 2,000-ton pressing force to handle thicker steels.
Q: What are the main advantages of GMD’s value proposition compared to other stamping suppliers?
A: We have high-tonnage machines that follow a transfer stamping process. Our machines have several dies that stamp components in succession to gradually reach the needed end geometry. This process requires more skill from the worker, which was an issue in Mexico. However, our team is completely local. We are not the only company that can offer this but it is certainly an advantage.
Q: What opportunities will USMCA’s new rules of origin give to European suppliers in Mexico?
A: USMCA will allow Mexico-based companies to export and import to and from the US free of tariffs. The main advantage is that trade flows freely, although there are a lot of rules. However, we have a specific trade department to support our clients in this matter. As an example, our experts work with Faurecia to help them interpret the new rules and laws through our previous experience with NAFTA and globally.
There are many opportunities in Mexico as the country is growing rapidly. We are not sure how long this will last since the industry has cycles, but now is the time to take advantage. Demand for stamped components is strong now and potential clients have come to visit us. We have 10 potential clients in the pipeline and USMCA gives certainty and confidence that more companies will come to Mexico.
Q: What role does GMD want to play in the electric vehicle revolution?
A: One of the most important issues for electric vehicles is autonomy and GMD Group is working to reduce component weight so autonomy can improve. GMD Group has an R&D department in France that is already focusing on this.
Regarding seat components, reducing their thickness can reduce the overall weight of the system considerably. Weight is proportional to the thickness of the components. By reducing weight, we help our clients shift toward electric motors. It is lighter to use a single-component seat than a two-piece that is welded and we can do that.
Q: What are your growth projections for 2019-2020 and when do you expect to see results from your OEM strategy?
A: Our goal for 2019 is to increase profit. We expect sales to double in 2H19 compared to 1H19 and our forecast is to have similar growth rates for the next three years. We have enough space to triple the size of the plant. In terms of machinery, we will receive one machine before the end of the year, plus one more next year. With those, we will fill the capacity at our existing plan, which will help us to deliver on our commitment to our main client, Faurecia. We also have other clients that represent around 10 percent of our business and that gives us more opportunity to grow. We will move to three working shifts from one and a half once we grow our manufacturing capacity.
In terms of OEMs, we still need to agree on one piece and then grow. If Volkswagen suggests a new plant in Puebla or Nissan in Aguascalientes, that would also be an option. GMD Group backs GMD Stamping in Mexico and it is a matter of seizing the opportunity.