Mar 26, 2001 Siemens Automotive AG (Regensburg, Germany) and the Yazaki Corp. (Tokyo) are forming a worldwide cooperative initiative in electrical systems for passenger vehicles. Dr. Franz Wressnigg, President of Siemens Automotive AG, described the joint initiatives as an important step in Siemens' strategic reorientation of its vehicle electrical distribution systems business: "We intend to concentrate on electrical distribution electronics and systems, while Yazaki will take the lead in this alliance in the production of wiring harnesses," said Wressnigg. The agreement with Yazaki involves two joint ventures for the sale, program management and development of vehicle electrical/electronic systems, for the combined global Siemens and Yazaki business at Ford Motor Co., BMW and Renault. A third joint venture will be dedicated to the manufacture of vehicle wiring harnesses. The transaction still requires regulatory and other approvals.
The first two joint ventures, which will be based in Germany and the United States, are designed specifically to be formed for the development and sale of vehicle electrical/electronic distribution systems. Yazaki and Siemens both have an equal stake in the joint ventures. A managing board consisting of six members, with equal representation from both companies, will oversee the two joint ventures where both companies have equal stakes. The contract also comprises a third joint venture for the manufacture of vehicle wiring harnesses in which Yazaki is to have a 75 percent share, to Siemens' 25 percent. This joint venture, based in Germany, will include Siemens' manufacturing locations in Slovakia, the Czech Republic, Lithuania, India, Turkey and Brazil. The manufacturing joint venture provides for a total of about 5,000 employees. Financial details of the transaction were not disclosed.
The synergies generated by the Siemens and Yazaki worldwide cooperation in vehicle electrical distribution systems lie in combining Yazaki's and Siemens' electronics, system know-how and manufacturing technologies. "This joint initiative allows us (Siemens) to apply our strategy of focusing on the development, manufacture and sale of electrical distribution electronics and systems, and further expands our position as one of the world's leading suppliers," said Wressnigg. This strong partnership will result in excellent customer satisfaction for the business already under development, as well as positioning the joint venture as a strong competitor for future electrical distribution systems business. Through its partnership with Siemens, Yazaki can further expand its position as the world's largest independent manufacturer of vehicle electrical systems, and in particular strengthen its presence in the European marketplace.
Siemens will contribute engineering centers from its Regensburg, Brake (Germany), Toulouse (France) and Detroit area operations to the electrical/electronic systems joint ventures to be based in Regensburg and Detroit. Yazaki will provide engineering proficiency from its Detroit and European area operations. By pooling their activities in engineering, sales, program management, quality and logistics the two companies will hold a strong position in the emerging market for the integration of vehicle electrical and electronic systems, which are increasingly in demand with vehicle manufacturers.
The proportion of control electronics in a vehicle electrical distribution system varies depending on the model, but currently represents about 20 and 25 percent of manufacturing costs. Siemens is to provide the electrical distribution electronics for the system joint venture and Yazaki will contribute the vehicle wiring harness and components. Siemens Automotive presently is one of the world's leading producers of vehicle electrical/electronic controls and supplies approximately two million Intelligent Switching Units per year to the international automotive industry. The third joint venture, for the manufacture of vehicle wiring harnesses, is to be based in Cologne and Regensburg. Siemens will incorporate into this holding company the manufacturing plants of Michalovce (Slovakia), Plzen (Czech Republic), Klaipeda (Lithuania), Chennai (India), Mudanya (Turkey) and Irati/Bahia (Brazil). At these locations, a total workforce of about 5,000 is predominantly employed in the manufacture of vehicle wiring harnesses. These Siemens plants recorded aggregated sales (derived from the manufacture of electrical systems) of approximately $214 million in fiscal year 1999/2000. The remaining manufacturing locations for vehicle electrical systems owned by Siemens Automotive AG are not affected by the agreement. Negotiations are currently under way with another company concerning the plants in Stribro (Czech Republic), Seixal (Portugal), Brussels (Belgium) and Puebla (Mexico). The 7,000 employees at these plants are predominantly dedicated to the manufacture of vehicle wiring harnesses.
Yazaki Corporation is a global leader in the development and manufacturing of vehicle power and data solutions and is continually researching and developing advanced electronic technologies for the automotive sector. Yazaki produces virtually every component associated with electrical distribution systems, including instrumentation, switches, junction blocks, connector systems, electronics and advanced technology. Worldwide, the company employs more than 100,000 people in 31 countries, 1,400 of whom are based in the company's North American operation and research center in Canton, Mich.
Siemens Automotive AG is a tier-one supplier of automotive and electrical-electronic systems and components with applications covering gasoline and diesel powertrain systems, safety and chassis systems, body electronics, electric motor drives and driver information systems. Worldwide sales in fiscal year 1999/2000 totaled $3.7 billion. Siemens Automotive is a wholly owned company of Siemens AG.
Siemens AG, headquartered in Berlin/Munich, is a leading global electronics and engineering company, employing over 447,000 people in 193 countries, with worldwide sales in excess of $74 billion in fiscal 2000 (10/1/99 - 9/30/00). The United States is Siemens' largest market, where it employs over 73,000 and recorded sales of more than $17 billion in fiscal 2000.
