Calsonic Kansei set to acquire Fiat Chrysler’s unit Magnetti Marelli for $7.1bn
The Japan-based automotive manufacturer, Calsonic Kansei, has announced plans to purchase Fiat Chrysler’s (FCA) high-tech parts-making unit, Magneti Marelli, for $7.1bn, Reuters reports.
The companies announced on Monday (22 October) the deal that will see Magneti Marelli, who specialises in lighting, powertrain and high-tech electronics, become the world’s seventh biggest independent automotive components supplier with $17.5bn in revenue.
Calsonic Kansei, owned by US-based private equity company KKR, has been negotiating with the FCA for a number of months, with Reuters’ sources previously reporting that the company made an initial bid of $6.6bn for Magneti Marelli.
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It is expected that the agreement will enable the new entity to reduce costs through synergies whilst increasing its core customer base.
In 2016, Magneti posted a turnover of $9bn and currently employed approximately 43,000 people.
The company is well-established worldwide with 20 facilities in 20 countries around the world, in addition to 85 production units and 15 research and development centres.
The agreement becomes the first major decision for new Chief Executive Mike Manley, after he replaced Sergio Marchionne in July following his decision to step down from the role due to illness.
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.