Linamar attributes success to innovation

Linamar, a CAD $2.3 billion Corporation manufactures a range of precision metallic components and systems – mainly for the automotive industry, as well as aerial work platforms for the industrial market. The 40-year old company is headquartered in Guelph, Ontario, Canada and has been in the news for its heightened focus on innovation that is expected to catapult Linamar’s revenues to CAD $10 billion by the year 2020.

Linamar recently announced a partnership with the Ontario government to invest CAD 1.1 billion. The funds will be used for a number of projects including technical and training to advance its product R&D and people development. Linamar believes its R&D investments will further their growth and sustain their competitiveness. On April 30th this year, the company announced the tentative acquisition of Ford Motor Company’s Converca plant and its Power Transfer Unit or PTU business in Nuevo Laredo, Mexico. According to a company press release, Linamar is interested in the Converca I Plant and product engineering group for its PTU capability, which would further enhance Linamar’s product offering in North America. The PTU is a critical driveline system which provides all-wheel-drive control to vehicles. Linamar has been manufacturing machines components and sub modules for PTU’s and their close cousin transfer cases for many years. Linamar’s PTU component manufacturing experience and related design for manufacturing skills complements the product engineering and assembly skill of this business.

“The acquisition of ACH’s PTU manufacturing and product engineering capabilities, with leading-edge PTU technology, would significantly enhance the depth of our Transmission/Driveline Group. The addition of the PTU business to our existing scope of capabilities widens Linamar’s range and enhances our offering of fully engineered systems, built on our component and module expertise. It is a natural extension of our strengths which we look forward to expanding, particularly in light of the growth potential of the PTU market,” said Linda Hasenfratz, Linamar’s CEO in a press release.

Linamar Corporation was started 40 years ago by Frank Hasenfratz and has 36 factories that are organized into five groups – Engine, Transmission/Driveline, Europe, Asia-Pacific and Industrial. The company has 11,000 employees, five R&D centers and nine sales offices in Canada, USA, Germany, Mexico, Hungary, China, Korea and Japan. The company prides itself on keeping ahead of competition with its focus on R&D and innovative products.

In March this year, Linamar was named one of the finalists in the process category of the 2007 Automotive News PACE Award competition for its Opti-Powerâ„¢ design and production system. The Opti-Power(TM) is an integrated design, development, and manufacturing process established to produce cylinder heads with optimized flow and combustion efficiency for internal combustion engines. This process technology provides a means to achieve high performance in the areas of engine power, emissions control, fuel economy, and engine refinement at a normal production cost that was previously unattainable with other manufacturing technologies. Linamar’s McLaren Performance Technologies division was integral in developing this technology, so important in today’s world driven to find ways to improve emissions and fuel efficiency in any area.

“The addition of McLaren Technologies design capabilities has proven to be a successful compliment to Linamar’s world-class manufacturing skills. This technology is key to improving fuel efficiency, a critical issue in the industry today. We are thrilled to be recognized as an industry innovator and we are proud to be chosen as a PACE award finalist,” said Hasenfratz in a press release.

Automotive Industries spoke to Linda Hasenfratz, CEO, Linamar Corporation.

AI: Please tell us a little bit about the re-branding of Linamar Corporation and what you hope to achieve by the exercise.

Linamar has evolved over our 40 year history. Our success has led us into new countries and enabled us to develop new technology resulting in new products. We felt the time was right to celebrate that success with a new look and message that told our customers, investors and employees about who we had become and where we are headed in the future.

AI: How much focus does Linamar place on its robotics and assembly systems? What are some of the breakthroughs your company has had in this division?

We are constantly looking for ways to improve our efficiency; it is a core element in our operational philosophy. Sometimes making those improvements means doing some automation, or utilizing robotics to make the operator’s job easier in some way. Our robotics engineers are very talented people who have come up with great solutions that use simple, low cost systems to improve efficiency. Our answer to automation is the clever, ingenious solution that doesn’t cost much but improves a bottleneck, safety or quality issue.

AI: Please tell us about Linamar’s automation systems for the automotive sector?

Making a decision around automation needs to be a balanced one, looking at the cost of the capital associated with the automation, the efficiency savings, the quality improvements, and the potential for reducing injury potential, i.e. related to the weight of the part or the risk of repetitive movements. Often, automotive programs in NA are fairly high volume which in many cases supports the business case to invest in automation. High volume programs increase the risk of repetitive movements and mean a higher overall weight of lifting in a shift. The health and safety side of that equation is compelling, as is the need for consistent repeatable quality in such a scenario.

AI: Where do you see growth for Linamar coming from?

We see growth at Linamar coming from several avenues. In NA, we see great growth potential for our automotive business as our customers look to outsource more powertrain components and modules as they streamline their own operations. Similarly, our automotive business has great growth potential in both Europe and Asia where today Linamar is small but with the same capabilities to grow as we have done in NA. Our industrial business also has great growth potential as we expand our product line and global reach for all products.

AI: Do you plan any more acquisitions and if so, where?

Our business has been built on a combination of acquisitions and greenfield plant construction. I expect that same pattern to continue into the future, with our acquisition strategy focused around companies that fill a hole in our strategy, whether it provides expertise around a particular component or module critical to a targeted module or system, or some technology innovation for products our customers can benefit from or processes to improve efficiency and competitiveness. Where the companies exist is less important than the strategic value they bring to us.