The following article appeared in Just Auto on May 2, 2019.
Royal Power Solutions, which supplies electrical power and signal distribution components for global vehicle and industrial applications, has opened a new assembly plant in the Queretaro, Mexico, automotive mega-cluster.
Production began in February and the plant is currently assembling automotive battery terminal systems, moulded plastic covers and studded eyelets for "multiple" Tier I and Tier II manufacturers.
After the delivery of dies from the US, the company will begin stamping processes in June to fully assemble automobile connection components and systems.
Manufacturing systems and components in Mexico allows Royal to localise the supply chain to companies assembling automotive wiring harnesses in the country, according to CEO Randy Ross.
"Several top customers asked us to be with them in Mexico, which has moved us up in the supply chain," Ross said.
"Our presence here reduces delivery times by five days and allows us to be more nimble in addressing their needs."
The 75,000 square foot plant is located at Parque Technologico Innovacion in Santiago de Queretaro.
Royal employs 60 at the factory and expects to increase staffing to 100 by the end of 2019. The plant can be doubled for future demand.
Equipment includes high speed stamping, moulding and insert moulding process technology from American, European and Japanese suppliers.
The plant infrastructure includes an Italian manufactured water cooling system, aluminium airlines, German made air compressors and a TPS system to optimise workflow and eliminate waste.
High speed stamping and production of terminal, connector, busbar and shielding is a rare capability in Mexican manufacturing, according to Chad Cranney, the Queretaro general manager and a 35-year automotive industry veteran with prior Mexico plant experience.
"Other companies have failed at stamping because they hire employees here and just expect them to figure it out," he said. "Precision stamping requires a unique skill set, so we are investing in knowledge transfer to properly train our team members."
This includes bringing senior managers from the US as well as sending key operations and technical workers to Royal's Carol Stream, Illinois headquarters for up to nine months of training.
"A lot of manufacturers look at Mexico as a huge cost-savings opportunity – which it ultimately is – but they expect instant results," Cranney said.
"It's not that simple. You have to invest in training long term to realize the payback."
According to Ross, Mexico will allow Royal to expand its business in the US where he does not anticipate any permanent job losses resulting from Queretaro production.
"This is an opportunity for us to develop new products and win new manufacturing contracts in the States," he said. "It frees up our most highly skilled team members in Illinois to take on more complex work that supports the rapid emergence of new electric vehicle architectures and complex systems designed and developed in the US."
The breakthrough innovation of fastener free/boltless, high-power connection technology is revolutionising the way automotive architects are designing in an ever-increasing electrified world, according to Ross.
New products are enabling better total systems cost and reliability, optimised packaging space and improved assembly and ergonomics for customers.
Royal, established in 1938, acquired Horizon metal stamping in East Dundee, Illinois in 2018.