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Investors Relations & Haldex information

European Union

1 December 2021

As a global supplier of brakes and suspension components, Haldex has sales operations around the world. But what may be less widely known is that much of the company’s manufacturing operations remain in Europe; so it has good cause to be considered a European brand.

For example, last year, although production of Generation 3/Generation 1 EBS brakes, and the ILAS+ and COLAS+ Duo and COLAS+ Single suspension systems moved out of Heidelberg, Germany, it restarted in a small town east of Budapest, Hungary – still comfortably within the European Union.

The transfer of production occurred during COVID lockdowns, says factory manager Balázs Keszey. And while the production machinery was dismantled in spring 2020 under the supervision of the manufacturers, then shipped to Hungary. The original plan to use their expertise in setting them up again was shelved with the health restrictions that prevented foreign travel.

What happened next at least dispelled any suspicions that the Hungarians were not as technologically-sophisticated as their western neighbours. How did they do it? Keszey replies: “We had to solve the assembly problems ourselves,” he adds.

Since the factory began operations in 2004, its several hundred employees have made products using manual or semi-automatic production. In contrast, the Gen 3 line is a heavily-automated system that includes testing and data management of performance of parts after each station. That data is handled by a database and software evaluates it and determines after each step whether the product fulfils the spec or not. He gives particular credit to local engineer Gergey Nord for setting up the automated Gen3 line, as well as Heidelberg’s former engineering leader Torstein Scheidt for (remote) assistance.

“We are focusing on automation competence build-up,” he adds, partly because this year the factory is gearing up to begin production of Haldex’s fourth-generation EBS product. That highly automated and digitalised line will be the first to be set up originally in Hungary. Serial production is set to begin at the end of the year.

And that’s not all, says the factory manager. He says: “Even for the older lines, we are planning a manufacturing execution system, an overall manufacturing support system to track and trace what’s happening in the factory and to measure KPIs [key performance indicators]. There will be digitalisation of data management, evaluation of information, and making it available online, to be able to react more quickly to deviations in production. This is the direction we’re going.”

Keszey in some ways personally embodies what the site has been through over the past year. Until 1 June, he had been the site’s logistics manager, but when the previous head left to take a global role, he was promoted to manage the entire facility. Since then, he has overseen start-up of two new lines, as well as supervising a ramp-up in production starting in September 2020 as customer demand boomed. And all of this was accomplished during COVID restrictions. “We have been doing concentrated work to perform and survive; now we are shifting modes to return back to normal life.” He, too, will shift; when previous factory head Imre Hege returns from a tour of duty in Mexico in November, he will return to his previous role.

The only big Haldex-made part that the site doesn’t produce is the ModulT disc brake, which is manufactured at Haldex’s Lanskrone, Sweden factory, which is also the site of its corporate headquarters.

However, Göran Jarl, himself a Swede, contends that the centre of gravity of Haldex is actually in Weyersheim, France, a northern suburb of Strasbourg perched just a few kilometres above the Rhine river separating France and Germany. It’s the site that he manages, and as he admits, it doesn’t make anything – its primary activity is a warehouse, but also holds central customer services positions. And that means that it is in contact with almost every Haldex customer.

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The site was chosen specifically to be at the physical centre of European distribution, or very near to it. “This place is about as central as you can get,” he observes. And that matters for the 4-5,000 parts stored in the company’s central warehouse, the oldest building on the site dating back to 1998. It was a product of European integration and replaced a series of smaller country-based parts stores.

“Over the years, transport has gotten better, and we have gotten better. We have all the parts in stock; that’s impossible to do if you have 10 small warehouses. From here we can get to most of Europe within 24 hours,” says Jarl. Along the way, it has taken on Midland Grau product lines, and has grown from 750m2 to 5,000m2. And a nearby logistics building has been extended in several phases.

Trucks from Budapest and Landskrona are unloaded, while other workers pick, pack and create kits of some components, with fasteners and accessories, for customers. A quality department checks that goods in meet corporate standards. Next door, customer service teams handle requests ranging from invoicing to price requests and tracking dispatched goods, in multiple European languages. The European technical service centre addresses engineering queries.

Jarl, who was responsible for setting up the facility, and who then returned to it after a 12-year stint at Haldex’s sales operation in Brazil, reflects: “A factory like in Hungary or Landskrona has different dynamics. We are always on our toes for the customers. We live from the service that we provide to customers.” He describes the culture at Weyersheim as “customer, customer, customer, ten times over. That’s the priority.”

COVID, too, posed some disruption for Weyersheim operations. Although in the event the site only closed down for a week, Jarl says that it was an extremely hectic time, as before it shut, the site shipped out much of its stock to distributors across Europe to support different local customers as a precaution – it wasn’t clear how long the site would remain closed. Then, recalls Jarl, “a couple of weeks after, we had to repatriate all of the stock to get the organisation back up and running.”

The warehouse operation currently runs two daytime shifts that are split to minimise the number of people in close contact; that is expected to change to a single daytime shift when masks are no longer required. Office staff have been affected too, for the most part being sent home, but at the time of speaking in June were being gradually drawn back to the office: first two days a week, and then three from July. There are some 65 persons employed there.

 

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