Home » Unlabelled » Are we missing the point? A Letter from James Beeson, KMP
James responded with a very interesting and thought provoking letter to the AFG Meeting from last Friday with Khun Manusphaibool – and gave the permission to publish it on this blog:
A Very professional speaker and very apt information.
However I think we are missing the point. Everyone is ducking for cover in this economic period, but for instance if I was an American Tier 1, I would be over in the States right now extolling how we are here in Thailand and trying to get them to transfer jobs/equipment and orders to Thailand because we can provide the cost, quality and technology to be competitive.
Thailand does not have the negatives that come from China (shortages or raw materials) stoppages while waiting for electric allocation to your district etc etc. We as automotive suppliers right now should be chasing work, not waiting for the next dear john letter.
We should be talking with the auto companies purchasing people to see if they have advance warning of some failed suppliers so that we can be looking at what we can do to support growth.
Right now, sure cash flow is tight, but KMP (Kulthorn Metal Products) is now at 7 days a week, production is up more than 30%, we have employed up to 30 new employees and we are working double shifts and growing, and even though we see the fragility of the future, we are aggressively going after more work, developing relationships, maintaining our profit margins.
It is hard when the banks and financial systems here in Thailand are running so tight, they are restricting their income streams too, like keeping your money under the mattress and expecting the mould to create new money.
Looking at each of the members of the AFG, we have the skills, the equipment, to be able to diversify into new areas if required, not put all the eggs in one basket, and wait for them to hatch. We all know that an abandoned nest doesn’t create hatched eggs. We need to look at diversification that will assist to insulate as markets rock back and forth, even if that means members of the association get together to look at what expertise is available to look at target and joint markets.
The bottom isn’t here yet, as auto companies suddenly realize that all those cost downs every year create negative reactions when the car companies just shut down instantly without any thought of the impact on suppliers, those small non diversified suppliers have no choice but to close or at best just survive, and when the car companies come back on with their demands for product I expect to see a couple of things, No 1 being suppliers will not be there to provide product, and No 2 some will need to demand increases in selling price to try to recover some of the massive losses.
So as the auto companies find some drying of supply, they will be seeking new suppliers at the old prices, and won’t be too interested in new tooling prices etc.
With best regards,