Over the past year, China's tire industry has been turbulent and chaotic. As a newcomer to the industry, Cao Kechang, President of Cooper Asia Pacific, led Cooper China to go all out to meet the challenges. What made him smile?
The price of rubber is like a roller coaster. Is it continuing to whistling or turning a corner and diving?
At 2:30 pm on January 14th, after sending a visitor with a smile, Cao Kechang rushed into the office, picked up the phone and asked the purchasing department to immediately buy a batch of synthetic rubber at the current price. His hands were a little shivering, but his voice was strong and with unquestionable confidence. The air tightened and dropped the phone. Cao Kechang stood at the window and calmed down his feelings. In this 17-story office in the western part of Shanghai city, we can see that weaving cars flow around the building day and night. He likes this perspective.
Cao Kechang is not a tumultuous speculator. As the president of the Asia Pacific region of Cooper Tire & Rubber Co., USA, he is not interested in financial speculation. “I only care about costs.†He showed an old smile. If you are humble, this is the impression that Cao Kechang brings to people. He always wears a blue plaid shirt. Even if he is in battle, he still looks like a college student who has just left his hometown in Taiwan.
This is really a fierce battle. It is full of joy and joy. In early 2009, the impact of the financial crisis made Chinese tire companies cold business. By the middle of the year, the sudden outburst of the economy caused them to be overwhelmed and fell into a state of serious shortage. From the end of 2009, the economic situation oscillated. Companies laid the price war banner, when raw material prices began to soar. Now, in this low-margin industry, many tire manufacturers have lost money.
Under such pressure, Cao Kechang seems to enjoy ... "This is where the management factory is fun." He said with a smile, his gentle eyes include responsibility, ambition and day-to-day hard work. This person often gets up at 3:30 in the morning, goes to work at 9 o'clock in the morning, works for nearly 16 hours a day, and keeps smiling. "How effective is it to go home so late?" People can't help but ask. "Very bad." He still answered with a smile. However, such a discreet person has used Cooper tires for three years to rank among the top three foreign tires in the Chinese market. Although it ranks ninth in the world, even if it is a global scale, it is more than six times its Goodyear, in China. Its production scale is only 1/4. Relying on the insistence on the correct production route, he can always seize the opportunity brought by each turning point and allow Cooper to maintain a double-digit growth rate in the Chinese market for three consecutive years.
When he left work on January 14th, as Cao Kechang had judged, the synthetic rubber price increased sharply again. The price of this monster rose by 12% in 10 days, but 3% was performed this afternoon after Cao Kechang made a heavy bet. It is conceivable that for a tire industry with very low profits and a price war at any time, what this 3% raw material price difference means. The headache is that natural rubber has risen by 50% since the end of September last year, and synthetic rubber has also risen by 40%. The timing of the purchase of raw materials has a significant impact on the profitability of the tire industry.
"Of course we also have the wrong time. The key is that we maintain a war-torn attitude towards the market." He showed his sincerity. Outside the window, the traffic flowed cheerfully, and far away, more vehicles joined in. "In this huge market, every challenge will be better."
If you walk on thin ice
Cao Kechang is a newcomer to the tire industry. At the end of 2006, when Cooper tried to establish a business in China and found him, he had worked at Kodak for more than 20 years. In the last few years, he was responsible for Kodak's digital marketing and marketing strategy in the Asia Pacific region, although Chemical professional background, but with the tire market seems to be no match for windy cows.
Fortunately, he is a learning mad. In his work of more than a dozen hours a day, an important part is reading financial news. In his mouth, the judgment of synthetic rubber and natural price increases is so simple. “First, natural rubber has soared. It is a replaceable product of synthetic rubber that will surely boost the growth of synthetic rubber. Second, a family An accident at a large chemical plant affected the supply of raw materials. Third, the rise in US stocks indicates that the global economy is in a macroscopically favorable position. More people will buy tires, natural rubber and synthetic rubber products.†He paused and smiled. “The last point is that I was chatting with a senior in the industry and found that the veteran who had done 20 or 30 years of tires was just like me. After sending him away, I immediately took action.â€
If you do not have the usual long-term accumulation, it is difficult for a novice to capture this fleeting opportunity. In fact, the thin Cao Kechang is always so fast from novice to expert. “When I read the doctoral, I told my brother that I was going to get the first degree in my class. So when people were sleeping, I continued to do research. I really got my doctorate first, and when I was working at Kodak I didn't speak English well, and I told my wife that I needed to do two more hours every day and I had a major breakthrough in Kodak after three years in the photographic laboratory. Rank NO.1.†For this “madmanâ€, there seems to be nothing that cannot be achieved. In Kodak's research on photographic materials, he obtained important patents in the fields of X-ray film, color film, and reversal film; When he switched to the printer and digital camera business, he quickly mastered the principles of its replacement through learning. He also belonged to the first group of people engaged in digital marketing, and created online ordering, online printing, and mobile online printing operations. New model.
And Cao Kechang's success in Cooper's fish shows that he has the same smell as Cooper. "Compared with Kodak, Cooper is a small company, but it is fast moving and everyone is very serious." This is not only reflected in the fact that everyone in Cooper's headquarters is working for more than 12 hours a day, and more importantly, it is for the Chinese market. attitude.
As the ninth largest tire brand in North America and listed in North America, Cooper was not officially admitted to the Chinese market until 2006. At this time, Michelin and Goodyear have already become ones. Cao Kechang believes that Cooper understands how to pick the right time. “Cooper is the only one among the top ten tire brands in the world that only focuses on the replacement of the tire market. It doesn't make sense to enter too early. Generally, cars only change their tires two or three years after purchase, but China The private car market began to take off in 2003. Since 2006, we have just enjoyed the benefits of replacement tyres."
After entering the Chinese market, Cooper made every effort to concentrate on expanding this business. When other tire companies set up factories in Malaysia, Thailand and other countries with the same low labor force, it did not get involved. "Or, three years ago we put the main event in the Chinese market. Now we prove that we are right. From the turnover point of view, there are not a few foreign-funded tire companies in the country that are bigger than Cooper."
Cao Kechang compared the Chinese tire market to the Spring and Autumn Period and the Warring States Period. The burgeoning demand for tires caused tire companies to spring up. “After the reshuffle of the global tire industry, only a few companies remain, but Chinese tire companies have about Three hundred or four hundred families, the future will inevitably shuffle the cards. This is a brutal process.†He said that he is bitter and hard to talk with employees every day. Although it is a bit slovenly, “The crisis is the driving force behind the growth of the company. You must know that you are not good. Places can improve."
For markets where change is unpredictable and uncontrollable, Cao Kechang has given four-word maxim: "Refining internal strength" - Reducing the cost of purchasing raw materials is just one of them, and more importantly, production management.
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Upgrade ideas
Cao Kechang admitted that he was not familiar with the internal structure of the tires, but he was very interested in the process of producing these black-eyed guys. As a person who likes to ask questions at the end, he is obsessed with the degree of obsessiveness in production management. After understanding his performance under pressure, you may call him a black belt master trained in Six Sigma, a model of lean production. .
"I'm not afraid of playing price war at all," said Cao Kechang. "Because the price war must be calm and deal with only one thing: the cheapest price and the highest quality. To do this will be able to win."
But the problem is that this is not easy. It is said that the stable quality of Six Sigma and the lean technology to improve efficiency have become the minimum requirements of modern enterprises. However, in reality, there are not many companies that strictly follow and there are fewer successful people.
The 200 million U.S. Cooper platinum Chengshan tire factory is located at the eastern end of the Shandong peninsula. This is a joint venture established by Cooper and Chengshan Tire in February 2006 and is one of the largest tire factories in China. “A process in which a factory is always undergoing development is not the optimal expansion and change, which leads to increased handling, increased time and error rate.†Cao Kechang could not stand it, but he was a loyal supporter of George Fisher. - The management master first promoted the Black Belt project during his tenure as Motorola CEO. In 1993, he went to Kodak and brought Six Sigma to Cao Kechang and his colleagues. In the decades of studying and working in the United States, Cao Kechang witnessed how Toyota had risen through lean engineering. He himself also had the experience of starting a small factory and understood the importance of productivity. "The market is yours when you make quality and efficiency, and the price is very low, but you can still make money."
The Cooper Chengshan Plant needed to adjust the production line, but the loss of the machine one day was money. How to reduce this loss? “In November 2008, we said that the opportunity has come.†Cao Kechang looked very excited, “At the time the financial crisis had just begun. The whole industry is very poorly sold. Isn't it suitable for adjusting the production line?"
They almost took down the entire factory. Tire production from smelting, calendering, forming, vulcanization, and inventories were detected. The distance between different workshops was as long as two kilometers, and the team of Cooper's team adjusted all equipment according to the ideal procedure. “Our factory occupies several hundred acres. We must use a forklift from point A to point B. The forklift itself needs money to buy. It also needs to be operated by people. Moving it will incur costs and time, and increase the error rate. So we change the assembly line. , Put the machine closer together and make the product closer to the production." At the same time, the factory cuts the production of semi-finished products by half, because the semi-finished product itself is money. The production line has been streamlined, and accordingly the personnel have to be streamlined. Cao Kechang said that this does not mean layoffs, but that in the future when the economy improves, the remaining manpower will be transferred to the increased production line.
Just after the four-month adjustment was completed, the economic situation in China improved, and a boom in car consumption drove the tire industry hot. "I have never encountered such a serious situation of shortage of goods. Whether it is truck tires or car tires, we are in short supply. We must queue up and get goods. Some customers have to wait for one to three months." Cao Kechang said, lacking The goods must be expanded as soon as possible, but at the same time they cannot increase their own costs. At this time, the adjustment of the production line played a role. “Our business has increased by 30%, but we have not added one employee.â€
In the first three months of 2010, Cao Kechang sighed with the price increase of raw materials. “Fortunately, we have made a swift and aggressive upgrade since 2008 to be able to calmly respond to this unexpected challenge.†He believes that there will be a group of companies in this area. With a rise in raw materials rising to bankruptcy, the tire industry will have to raise prices and the cruel price war may come to an end. However, he said Cooper still continues to increase production efficiency in order to reduce production costs and reduce rejects and rejects. "I hope to make our profit space even bigger and minimize the proportion of raw material fluctuations."
The path to change
Conversing with Cao Kechang is like browsing a history of global business development. He is well aware of the upgrading and replacement of technology products in the past three decades and the trend behind it. His requirement for himself is to learn new things every day. "When I and my son can communicate easily, I know I have not fallen behind."
He said that in the history of business in the world, there is an old-fashioned principle that product and operating strategy must reflect the correct market demand. The market demand is constantly changing. Only serious study can improve the ability to respond.
When we talk about the Chinese tire market, we have to talk about the transformation of truck tires. “China became a global factory in the 1990s, which led to the development of business such as mining, which has driven the demand for truck tires. Before 2003, China’s truck tire demand must first be overloaded. At that time, Chinese tires could be overloaded by 300%.†With the increase of highways and the emergence of large-scale fleets, quality and safety have been placed first. “The overloaded tires generate large amounts of heat and cannot be run on the expressway. This is the first rapid change in the Chinese tire market; followed by the emergence of transportation fleets such as Sinotrans, and passenger trains such as fast passengers, which attach importance to safety. And fuel-efficient, this is the second change." Cao Kechang said that in these two areas, Cooper's moves are very fast. At present, it is the first-class brand of domestic car tires.
The rapid change in truck tires requires a new sales model. For this reason, Cooper launched the “Solid Platinum Camp†in 2007 to teach Cooper retailers and consumers how to select tires and how to maintain tires. "The difference between the Chinese market and the overseas market is that Chinese consumers are not familiar with auto parts and most people will not change tires, so there is no concept to choose a good or bad brand. This is an education process." In the pivot plan In addition to educating consumers with comics and other lively and fashionable methods, Cooper employees also went to the agents at their own homes to teach different tire selection methods and maintenance knowledge. Cao Kechang referred to this as "necessary hard work." This can't be the same as a telephone game, teaching class two, class two teaching class three, and the last meaning is all wrong. We must teach it in person, although it takes time and money.†Baopu Shouyu, this is almost Cao Kechang. And his team brought all the impressions, and as a 90-year-old company, Cooper was able to become one of the only two tire brands in the US in the Ebb Tide, precisely because of the long-term vision and stability. â€
However, this does not mean that Cooper does not understand it. Cao Kechang said that the success of the Chengshan factory's joint venture lies in its cultural integration. For example, it will announce the workers' wages and make them feel transparent and fair. This is unthinkable in the United States. For example, when management and the Chinese workers get along, they always first Talk about its advantages and then talk about its shortcomings, rather than ruthless. He believes that the integration and transformation has contributed to the success of this marriage. "We must know that our competitors also operate in joint ventures in China, but many of them are not successful."
At present, Cooper has two factories in China, a large proportion of which are exported. And the biggest change in this industry is also the first to start in foreign markets, that is energy saving and environmental protection. Since 2010, in view of human health, the European market has demanded the use of environmentally-friendly oils for tires and at the same time demanded a reduction in tire noise. In 2012 will also require a substantial reduction in tire resistance to reduce fuel consumption. Cao Kechang said with a smile that this is not a simple matter. "The reduction in resistance has to be able to withstand the car. This is a huge challenge." But he said he likes to challenge the future and will follow this change to run the business.
“We are also a small achievement in China today. Our quality is well-known in China. The proportion of Chinese business in Cooper is increasing globally, and we are now calculating the cost faster and faster...†Cao Kechang Looking back, it looked radiant, although it was 3:30 in the morning, but he did not even have a tired look.
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