GW: What are the benefits of the recent restructuring of Fuyao Glass’ North American operations?
In June 2019, we formed Fuyao Group North America. In my role as CEO and President, I am responsible for the OEM business units in the USA and lately we added FGI, our float glass business unit and FYSAM Mexico into the North America Group, with all general managers reporting to me. We are now utilising our resources more efficiently across the whole team in North America, meaning Fuyao Chairman, Cho Tak Wong, is able to focus his efforts on the business in Europe and elsewhere in the world.
It is working very well.
GW: Having already registered impressive profit levels in 2018 at the Fuyao Glass America (FGA) automotive glass fabrication facility in Moraine, Ohio, how did that business unit perform in 2019 and in 2020 prior to the Covid-19 crisis?
Our profits further increased in 2019 and before the pandemic, we set record profits for the first quarter of 2020.
GW: In general, how has the pandemic impacted the business?
We can turn the crisis into an opportunity and do better than our competitors. We are well prepared and the situation actually gives us the chance to increase market share. Even during the pandemic, we were still able to gain new business.
We used the period to be accountable, add to our capabilities and improve our entire management structure. I can already report that the team is doing very well; more than ever before, there really is a real team effort.
GW: How quickly will the automotive sector in North America recover?
Some experts forecast that it will be 18 months before levels return to those before the pandemic… but depending on future waves of the virus, we can get back to levels of normality by the end of this year in the USA. However, social factors could make the recovery slower in Mexico.
GW: Having invested substantially across Fuyao’s operations in North America in recent years, are further upgrades planned during 2020?
We have budgeted approximately $40 million for renovating and increasing automation. In a high volume business such as ours, customers require speed… so we have to constantly improve productivity to meet their needs. For example, we are investing significantly in robots as we move towards Industry 4.0. In terms of numbers, the workforce will continue to grow but robotics can reduce their workload, further improve working conditions and allowing them to focus on more beneficial areas of the process.
We are always pursuing new business and whatever the customer needs, we will invest in new lines accordingly.
GW: So the decision for Fuyao Glass to enter the American region has been vindicated?
We follow customer demands and that’s the main reason we came to North America in the first place; there was a real demand for Fuyao to come here and supply. We know the supply chains are so critical and that’s why customers were so pleased that we set up in North America. For the automotive industry, we follow the golden QSTP (quality, service, technology and price) values and can offer all the key elements to customers. That’s why we continue to gain more programmes and more business from our North American customers.
GW: When competing for share of a potentially reduced marketplace, how will FGA differentiate itself from other suppliers?
We have to do better than our competitors; that’s always our goal.
The automotive business is truly a survival game and whoever does the better job will prosper. Our core investments in technology, people and the process put us in a much better position than most to further increase our market share. We have a very solid team, our own supply chain and the competitive tools to provide customers with the very best service.
GW: Having worked with leading technology suppliers such as Henry F Teichmann, Glassline Corporation, Grenzebach, Bystronic glass (now part of the Glaston Group), Mixer Systems and Glasstech at your America operations, how important will their contributions be to achieving your growth plans?
As previously mentioned, we are now investing significantly towards Industry 4.0 and we have been able to improve our productivity by a minimum of 30% in recent times. When dealing in high volumes, our customers need us to produce glass faster than ever before and our investments in equipment and automation are crucial to meeting their needs. We have upgraded our operations in many ways and will continue to do so. It is a must.
Another major benefit of investing in new technology is attracting young people to work for Fuyao. The reality in the USA and other countries is that the younger generation often don’t really want to work in traditional manufacturing environments. Our investments into such areas as robotics and automation help us attract the top tiers of young people. In fact, some college graduates who have worked with us for only two-three years have already been promoted to managers. They learn quickly and are smart and because we can provide them with an environment to progress and succeed. We have a much younger workforce than a few years ago.
GW: Is Fuyao Glass still prioritising training and safety for its workforce?
Yes, very much so. I am leading the company to build a great culture and that’s why safety is our number one priority. We have addressed previous challenges and our incident rate has dropped to such an extent that we are now approximately 30% better than the same industrial standards. We have even received commendations from OSHA (Occupational Safety and Health Administration).
People are the key to our success and they are my priority. We are creating an environment to make us the best company in this region to work for. We care about our employees and they are now caring about the company in return. By providing them with great opportunities, it is leading to a settled and motivated workforce.
We treat our employees fairly, introducing initiatives such as free lunches, regular team building exercises and recognition programmes, employee suggestions and continual improvement programmes etc. We have created a friendly working environment and are building a great culture across our operations.
GW: Is the team now less reliant on expertise from China?
The terrific technical expertise in Fuyao’s Chinese team cannot currently be found elsewhere and is a real advantage for us day and night. Fuyao also has two R&D centres in China, with top tier researchers and we have recently formed strategic partnerships with some really high tech companies.
The Chinese and North American cultures might be different but both have advantages and the teams really appreciate each other. Our philosophy is to combine strengths and this is a key reason why we are successful globally.
We have ramped up our localisation plan across the North American business units and have a master programme to train the local people. Globally, Fuyao has accumulated many years of expertise and day by day, that is being transferred to the local environment… so within the next few years, the majority of employees in America will enjoy the same high levels of proficiency with little input from China.
GW: Is Fuyao successfully integrating into the local communities in America?
Yes, Fuyao as a company is a major contributor to the communities and personally, I am an advisory board committee member of Ohio county government. We have been making donations to support several non-profit organisations through the Heren Foundation USA, which was established by Chairman Cho. During the pandemic, Chairman Cho’s generosity in donating tens of thousands of personal protective equipment to frontline workers in Ohio was recognised by Ohio Governor, Mike DeWine and I also received a letter of appreciation from the mayor.
GW: How will your personal experience of over 20 years in the automotive business be useful during this challenging period for the industry?
In this sector, you need to know your business. My expertise and contacts enable access to all kinds of resources and information that can be used as unique tools to manage the business and be able to talk to customers professionally and knowledgeably.