QUALITY, LOGISTICS

AND HIGH HOPES

The Saragossa-based Engine Cooling division of the multinational automotive parts supplier Valeo has
scored top for quality amongst the Valeo Group’s 120 plants. With a bold international expansion plan
stretching to Korea, China and beyond, Valeo Engine Cooling Spain has good reason to look forward
to the future. Oscar Del Santo talks to Jose Luis Garcia Cebolla, division’s sales and export director.

I
n recent years the general public has had
to become acquainted with large OEMs
slashing jobs and closing plants in response
to slumping market shares and financial
losses. In fact, there seems to be no sign
of an end to the woes of some of the better
known names, as a cursory glance at any
daily newspaper will prove.
This is the reason why, in this climate of
painful restructuring and serious over-capacity
problems, the generation of revenue and
growth by Valeo Engine Cooling Spain is
all the more remarkable. “We are betting
on growth, and once our Korean venture
is consolidated, we are willing achieving
double-digit growth figures”.
“We are currently exporting 95 per cent
of our components worldwide and are
renowned as a top exporter in the region
of Aragon where we operate; this has earned culation coolers) for diesel engines in com- why the authorities have pushed legislation
us recognition, both inside the Valeo group pliance with European emissions standards. to minimise its harmful environmental impact.
and in the wider community, as the award As our more mechanically inclined Most internal combustion engines are
of the 2003 Top Exporter Award by the readers will know, diesel engines require fitted with nox reduction systems, and
Zaragoza Chamber of Commerce is there EGR systems to meet the ever tighter EGRCs are considered to be of the most
to prove.” nitrous oxide or ‘nox’ emissions standards, efficient and cost-effective solutions. As
Valeo Engine Cooling Spain specialises something that has serious environmental the name implies an amount of exhaust
in two product lines: the manufacturing of implications. Nox is formed due to the gas is recirculated to the engine cylinders
a range of radiators in various materials chemical reaction between the oxygen through a system of tubes and valves; it is
(copper, mechanical aluminium and brazed and the nitrogen in the air at high combus- the presence of this exhaust gas that inhibits
aluminium) and automotive engine-cooling tion temperatures and is a major contrib- the generation of nox during the combus-
systems such as EGRCs (exhaust gas recir- utor to smog and acid rain. This explains tion process, principally by reducing the

Industry Europe 41
combustion temperature. In a diesel engine
it is necessary to cool the gas prior to its
introduction into the cylinder, which is why
a heat exchanger or cooler is required.
“The Engine Cooling division of Valeo
decided to centralise the manufacturing
of radiator and condenser spares for vehicles
that are no longer in serial mass production
in our Saragossa factory. Every year we
receive production transfers from other
Valeo plants and we have to adapt our
process to the specific requirements of the
aftermarket. This side of the business repre-
sents approximately one, third of our turnover.
“We have been continuously engaged
in engine exchangers ever since Valeo
started work to develop a suitable product
in response to European requirements for
emissions reduction. We are leaders in
Euro 3 and Euro 4 EGRs but, as everyone
knows, restrictions are getting tougher
and tougher, and every four or five years a
new normative comes up that requires a
design modification. So far we have man-
aged to be one step ahead of the game
42 Industry Europe
and, thanks to the big efforts of our devel- were introduced for the production of copper
opment team, we already have highly com- radiators. It was after the absorption of
petitive Euro 5 products available; this Chausson by Valeo that we came to be
gives us an edge over many competitors.” known as Valeo Engine Cooling Spain.
Today we are firmly established within the
The secrets of success Valeo group as one of the most successful
Valeo Engine Cooling Spain currently employs plants within.”
over 700 workers and produces more than The Valeo’s philosophy is based in the
three million units a year for some of the 5 Axis: Involvement of Personnel, Valeo’s
major international OEMs such as Toyota, Production System, Supplier Integration,
PSA, VW, Nissan Renault, Fiat or Hyundai Constant Innovation and Total Quality.
– apart from the already mentioned radia- By the use of these tools, and mainly the
tors and condensers for the aftermarket Involvement of Personnel, Valeo Engine
passenger cars. It possesses the ISO 14001
environmental certificate and the ISO TS
16469 quality certificate. With a turnover
in excess of €100 million and R&D repre-
senting five per cent of sales, it has come
a long way since it was founded as ‘Puma
Radiators’ in 1949.
“At the time, production was hand made.
The great leap forward came when the
company was acquired by the multinational
group Chausson in 1963 and modern
manufacturing techniques and procedures
Industry Europe 43
VALEO TERMICO ■ AUTOMOTIVE
Cooling Spain has reached an enviable
productivity record.
Safety, work environment, ergonomics,
teams autonomy are items which are fol-
lowed by managers and workers. In order
to develop the skills of the people, training
is mandatory, and Valeo Engine Cooling
Spain has a three-year individual schedule
plan to make it happen. A strong and fluent
communication at all levels is also a powerful
tool used inside Valeo Engine Cooling Spain.
The other pillar on which Valeo Engine
44 Industry Europe
Cooling’s success seems to be founded is
an almost obsessive concern for quality.
As Mr Garcia says, “It is not just that only
the best will do: it is the fact that we have
succeeded in aligning modern quality man-
agement with our everyday processes and
activities, resulting in greater efficiency,
performance and quality of our products.
“In 2005 we managed to halve the total
line rejects and ensure single digit ppm on
quality delivered, as well as implementing
Kaisen dynamics elsewhere. We aim to
as an example of good practice.
“Coming back to the point I was making
about quality, we are checking internal
and external quality on an everyday basis
and it is not unusual to see our managers
monitoring the lines and discussing quality
issues with employees on the shop floor.
Highly trained staff committed to quality in
a company they see as theirs makes all the
difference. It is no surprise to us that we
came top in the Valeo group’s 2005 internal
quality audits out of 120 plants worldwide.”
A bright future
With OEMs applying more and more inten-
sive cost pressure and supplier scouting
on the rise, how does Valeo Engine Cooling
Spain intend to avert the pricing down-
spiral and profit slashing that seems to be
troubling so many of its competitors? “Of
course we are in no way overconfident,
but we are definitely looking on the bright
respond within 24 hours to any customer
concern and our excellence in both logis-
tics and quality was recognised with the
award of the prestigious Premio Pilot
(Pilot Award) in Zaragoza.
“Zaragoza is, as a matter of fact, a city
linked to logistics excellence in Spain due
to its geographical location and the fact
that some major logistics companies are
based here. Some of our employees lec-
ture on logistics for the university’s Masters
in Logistics program, and we are regarded
side of things for the short to mid term.
Automotive OEMs have outsourced some
of their central functions to suppliers with
a global capacity who are really com-
mitted to R&D and are playing the long-
term game; Valeo Engine Cooling Spain is
one of those suppliers.
“Automakers are increasingly realising
that focusing their purchasing strategies
primarily on cost is not always the best
strategy and I find that more and more
emphasis is being placed on innovation,
logistics and quality: three areas in which I
believe we excel. At Valeo Engine Cooling
Spain we have established some solid
partnerships that we believe will translate
into double-digit growth figures soon.
“This year our Korean operation has
been one of our main focuses. We have
been involved in the setting up and imple-
mentation of a production localisation
plant in Korea where we will serve
VALEO TERMICO ■ AUTOMOTIVE
Hyundai; last year our sales to this car
manufacturer represented 7 per cent of
our turnover and we forecast that the
figure will go up to 11 per cent this year.”
Because of this transfer, the company
is predicting a certain degree of stability in
the next couple of years that will be fol-
lowed by an upturn in sales. “We are
working to consolidate our international
expansion,” he says. “Our next develop-
ment goal is the USA, where the diesel
truck market offers great opportunities for
our EGRCs. We are also working on two
projects in China and we are well pre-
pared for European developments since
our Euro 5 products are already validated.
We are forging partnerships with major
OEMs to supply them with promising and
competitive technologies and cutting-
edge innovation.” ■
www.valeo.com
Industry Europe 45