No intention to be OEM, Magna adheres to "customer first"

Scott E. Paradise: Vice President, Global Marketing & Business Development, Magna International of America, Inc.

He joined the Company in 1986. In 1990, he was appointed Sales Manager -- General Motors and in 1993 was elected to his present position.

Fred Kao: Vice President of Magna International China

Just prior to assuming his current position, Mr. Kao had been responsible for establishing the Magna Closures operations in China. This included the establishment of the China sourcing office and the China manufacturing operations. Reporting to the President of Magna International, Mark Hogan, Mr. Kao's responsibilities include strategic oversight of Magna's operations for the region. His prior experience in the automotive industry includes management responsibilities with General Motors from 1984 to 1989.  With General Motors, Mr. Kao held positions in engineering, quality control and production.

Keith Lomason: Executive Director of Magna International China

In February 2004, Keith Lomason was appointed Executive Director, Magna International, and China. Keith's direct experience with China dates back to the early 1980's, when he was trained as a Chinese Linguist by the US Marine Corps, and had an opportunity to visit the mainland during a 2 year tour of duty in Okinawa, Japan.  After an honorable discharge from the Marines in 1985, Keith joined his family run automotive business, Douglas and Lomason Company, where he held positions in Employee Involvement, Production, Material Control, and Factory Management.  In 1993, he visited China on a fact-finding mission, and subsequently was assigned to perform the partner selection and contract negotiations for the formation of a 50/50 Sino-US joint venture founded in February 1996.  Keith was appointed President of, and managed for 8 years, Shanghai Lomason Automotive, specializing in manufacturing seat frames for the domestic market.  Magna International acquired all of Douglas and Lomason Company in late 1996, including the 50% ownership of Shanghai Lomason Automotive, and the JV subsequently became one of Intier Automotive's operations.  During his 10+ years in China, Keith has been active with many different business and trade organizations, including various Chambers of Commerce, and is currently serving a term as a Chairman of the Board for the Shanghai American School.

The Ninth Edition of a Series of Interviews with MNC Auto Parts Suppliers

Gasgoo: Thank you very much to accept the interview from Gasgoo.com. Firstly I want to say happy birthday to Magna's 50th anniversary.

Scott E. Paradise: Thank you.

Gasgoo: Can you briefly introduce the specialties of Magna in the Shanghai auto show?

Scott E. Paradise: We introduced Mila, downstairs, which is the combination of all of our capabilities wrapped up in one vehicle, from design and development into a production vehicle. We've also got our latest technology in terms of Stow 'n Go seating downstairs, the Cadillac instrument panel, which has our leather wrap capabilities on it, we got our latches, that are made here, global latches, so it's very high-tech products, and window regulators, we've got our mirrors which have a camera-aid in it, a reverse aid capability and lighting capability for turn signals, we've got a powertrain group which has got the latest technology, transfer cases and various drivetrain components, water pumps, oil pumps as well, and then we've got our newest acquisition car top systems which is the retractable hard tops and soft convertible tops, a highly-complex engineered product. And they work very closely with the Magna Steyr people when doing complete vehicles.

Gasgoo: We all know that Magna is a very famous spare parts group, introducing a lot of things. Does Mila have a special meaning for your strategies in the future?

Scott E. Paradise: The emphasis is really to show the world that Magna has a complete capability to design, develop and not only build a vehicle but a vehicle that utilizes low weight, low mass material, high  strength, low mass. It has a unique propulsion system that compress natural gas and the overall ability is just to test and bring a product to market all inside of one company. So it's extension of our Graz facility in Austria, where we have one assembly facility, two assembly plants on site and we built five different brands for the OEMs.

Fred Kao: I think it's also important to note: bringing Mila to China it simplifies a lot to us. It is probably the top of our technology and represents bringing everything together and also downstairs earlier today you saw our ceremony, we were also introducing the presence of Magna Steyr into China as a registered company now. So again we're indicating and we want the Chinese market and car companies and customers to know that we want to bring our best technology and full capability of Magna into China here as well.

Scott E. Paradise: Let me just reinforce. When we develop the Mila we did it with the sole purpose of showing capability, not to be competitive with the OEMs that are out there today, our main parts that we manufacture, how we make our living is to selling parts to the OEMs. We are not in the business competing with our customers.

Gasgoo: But Magna also have the similar business in vehicle assembly.

Scott E. Paradise: In Graz, yes.

Gasgoo: and you are also very active in the merging of Chrysler.

Scott E. Paradise: We are looking to the opportunities at Chrysler, as we would with any of our customers. A healthy customer means we will be healthy as well, and they represent a significant amount of our sales on a global basis, so it's only natural that we want to take an interest in them and a long term future and continuation as the builder of vehicles

Gasgoo: We know that China is booming now in the automotive industry. We read the annual report that in the year of 2009, the China business will access 15% for magna global business. Is that true or not?

Scott E. Paradise, Fred Kao: In total sales for the company, that's for Asia by 2010.

Gasgoo: Comparing the current situation can you give us your strategy for the future? How to realize this goal?

Fred Kao: I think, again to come back to that. To realize that goal, is when the market is growing then we see the opportunity, there is underlining to our Magna culture, we have a saying, we want to produce a better product, and the point to success is to provide a better product at a competitive price. So we want to continue to focus on producing a better product for our customers. And I think it's not a very complex strategy, I think a very simple one. And we believe if we can do that, then we will also be rewarded with growth here in China for our customers.

Scott E. Paradise: We have looked on a global basis where our customers are growing, and we've chosen China, India, Thailand, Korea and Japan as areas for us to concentrate in. As big as Magna is, does not have the ability to be in every country around the world. So those are the areas from an Asian specific stand point that we're looking to grow. If opportunities present themselves somewhere else in Asian region and the customer wants us to be there, we will absolutely look at that and asses the viability of it, and if it works, we will put a facility wherever our customers want us to be.

Gasgoo: How can you cooperate with the local OEMs in China within 5 years, any strategy plans?

Heith Lomason: I think we've already made tremendous strikes with the local OEMs. Our two groups that have been here for quite a number of years, Donnelly mirrors group and the seating group, have extended their customer base to beyond the foreign invested joint ventures to include many of the domestic OEMs, and we see that there is still a little bit of difference between the needs of foreign invested OEMs and domestic OEMs. The foreign invested OEMs are really pushing us to bring the most recent technologies, our true tier-1 management capabilities so that we can take over the management of the tier-2 and tier-3. The domestic OEMs are hoping to get that as well, but they really focus more on the systems integration, for example, bring a solution to me, I want to complete interior, I need someone to design it and manage everything about it, bring us the powertrain, help us with the engine. So the domestic OEMs' requirements and needs tend to be broader, than the foreign invested OEMs', tend to be more specific. But I think there is a place for us with all of them, so we find out what they need, and we focus on that.

Gasgoo: Ok, thank you, we hope Magna will make great achievements in great China. Thank you to accept the interview.

Heith Lomason, Scott E. Paradise: Thank you. Thank you very well.

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