DANA China—Challenge brought by rapid growth

John Leech: Vice President for Business Development of Dana Asia-Pacific

John Leech started with Dana in 1985 as a Product Application Engineer for the Spicer Driveshaft Division. He went on to hold various positions within the Driveshaft Division, including Manufacturing Engineer and Quality Manager at the Gordonsville, Tennessee facility and Regional Driveshaft Centre Manager in Lenexa, Kansas. In 1992, he was promoted to Plant Manager for the Gresen Hydraulics Division's Greenville, South Carolina facility. In 1993, Mr. Leech was again promoted to Director of Business Development for Dana Japan in Tokyo, Japan. From 1997 until 2000, Mr. Leech was the start-up Plant Manager for the Parish Structural Products plant in Owensboro, Kentucky. He was appointed General Manager for the American Electronic Components Division in October 2000 and became Vice President of Asia Pacific in March 2003.

John has a Bachelor of Science in Mechanical Engineering from Ohio State University and a Master of Business Administration from the University of Toledo.

Introduction:
Dana develops much faster in China than global average. Though its annual revenue of 2006 is not available for us, we also can infer a lot from its business development in China: the facility scale in Fuzhou was doubled; Dana and Dongfeng Motor Co., Ltd. signed joint-venture agreement to produce commercial vehicle axles; Dana gets the orders from Shanghai General Motors' Buick Park Avenue and Cadillac SLS; 35% of Dana's Chinese business owes to the export from its facilities in Fuzhou, Shenyang and Wuxi to Thailand, Australia, U.S.A., etc., which is very active among global automotive suppliers.

John Leech, vice president for business development of Dana Asia-Pacific, stated that by the end of 2007, Dana's sale in China would increase by three times than that of three years ago. He said, "I think what we found exciting about China and the biggest challenge is faster development in China than anywhere else. It's not just a matter of being able to do what the customers demand, but go fast and fast following customer's demand. And I think that's the challenge."

The Eighth Edition of Series of Interview with MNC Auto Parts Suppliers

Gasgoo: Thank you very much to accept our interview from gasgoo.com. First of all, can you briefly introduce your company to China?

John Leech: Thank you. My pleasure to have the interview today. Dana Corporation is a global automotive manufacturing company with over 100 years of experience. Dana now has been in Asia-Pacific Area for over 40 years. And we have operations in China: in Taiwan, in Shenyang, in Fuzhou, and in Wuxi. Our company provides automobile and commercial vehicle parts in terms of axles, prop shafts, thermal products which are oil coolers, structural components, and sealing gases.

Gasgoo: Ok, thank you. How many factories? When did you enter China's market?

John Leech: We started in 1992 with a joint venture in Shenyang. We follow that with a joint venture in Fuzhou and Wuxi. In 2000, we established a wholly owned facility. We have a Shanghai representative office. And that's what we have.

Gasgoo: Did you build those local factories in order to offer better services just for the China market or as a manufacture center to export outside?

John Leech: I think each of our factories was established in China with the intention of growing the domestic China market business. That's been good for us. But we also then have utilized those operations as a base for exports of components and products to other Dana global facilities.

Gasgoo: For those factories, do you also have your own R&D center in China?

John Leech: Each of those factories belongs to different Dana business units and they utilizes the engineering and R&D centers all around the world, but we don't have currently in China a R&D center.

Gasgoo: So you bring the major technology to those areas and manufacture it?

John Leech: Yes.

Gasgoo: Did you have any future plan for the R&D research?

John Leech: I think as our business in China grows, and as the needs of domestic auto makers become more and more important, it will become necessary for Dana to establish a R&D center to support our partners and our business in China. So yes, I think it will happen.

Gasgoo: We also interviewed the Magna. In their plan, in the year of 2009, the China business will exceed more than 19% to their global business. So what's the Dana's plan?

John Leech: We don't think in terms of plans or percentage of our global business, but I think by 2010, China will be important for us in support of our global business as low cost manufacturing center. In terms of domestic production, I imagine Dana will approach 10%.

Gasgoo: Do you also purchase in China for the global business?

John Leech: Of course. We have a sourcing office in China. It supports Dana global operations. But we also use our own operations to support our own global operations.

Gasgoo: Who are your main clients in China?

John Leech: We have a number of customers. Of course Jinbei Passenger, Southeast Motors; we support Dongfeng Liuzhou, Zhengzhou Nissan; we now have business with Shanghai General Motors, and soon with Chang'an Motors. So we supply over 30 domestic Chinese automobile manufactures.

Gasgoo: During your contact with those local OEMs, do you feel anything different?

John Leech: I think especially you can see in the auto show this year, it's a good example. The level of quality of the vehicles just continues to go up and there is a less and less gap between Chinese manufacture and global OEM. And that's good for us to say. And we're just glad to be part of that.

Gasgoo: Do you have anything you want to say to Chinese suppliers?

John Leech: You know, there are some good Chinese suppliers out there, and at the end of day, we recognize them as good competition. For us, it's going to be on the global bases, that people will survive and do well and can provide a high quality product with a good price and on time.

Gasgoo: How do you think of the China commercial vehicle industry?

John Leech: I think the China commercial vehicle industry is changing rapidly. I think it's improving their capability, I think it's good. And I think some of the efforts we are working in terms of our partnerships with Dongfeng Motors, is a good example of how Dana perceives us as an important part of the global market place.

Gasgoo: During your working in China, do you face any challenges?

John Leech: I think China itself is a big challenge. I think the thing that I find exciting about China and the biggest challenges is that things move faster in China than anywhere else. It's not just a matter of being able to do what the customers demand, but being able to move faster as the customers demand. And I think that's the challenge.

Gasgoo: Ok, thank you, John, we also hope Dana can make great consumers in China's market as well as globally.

John Leech: Thank you so much. It's my pleasure.

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