Bosch Australia wins global safety trailer role

BOSCH Australia has been designated as the German automotive giant’s world centre for trailer safety after local president Gavin Smith played some high-stake corporate chess back in Berlin.

The new mandate is part of the reinvigoration of Bosch’s Australian subsidiary following the body blow of losing its chassis control manufacturing operations four years ago.

The local subsidiary has also been granted its own research and development budget for the first time and this will be used, among other things, to develop the first trailer safety products.

The trailer safety centre is the second such world centre of competence located at the company’s site at Clayton in Melbourne.

Clayton has for some time been the sole global source of power diodes – crucial parts in vehicle alternators – for the entire Bosch group. Bosch Australia expects the diode business to double in a few years, following a recent decision to allow it to sell to non-Bosch buyers.

Being granted responsibility for trailer safety will add to Bosch Australia’s automotive engineering strength and, along with the related manufacturing, will help fill in some of the gaping wound left when Bosch in Germany moved the chassis control manufacturing to Asia, with the loss of 380 local factory jobs.

Currently Bosch Australia has around 120 workers producing 92 million diodes a year and 200 engineers designing chassis controls and ‘comfort electronics’ for offshore car-makers.

The trailer safety mandate is part of a multifaceted revitalisation program stitched together by Mr Smith.

He came to the office only months after the decision to close down Australian chassis control manufacturing in late 2011.

“At the start of 2015 we were finally successful with the parent company to get a growth and innovation budget allocated for Australia,” Mr Smith told GoAuto.

“It’s something I have been working on literally for the last three years, building the case, making the case why it’s necessary, why we should have such a budget here and, after probably two false starts, we got it over the line late last year and it was finally confirmed early this year.” Believed to be worth several million dollars, the growth and innovation budget will give Bosch Australia engineers a chance to come up with something unique in the Bosch group.

“It’s about making sure that the local business can devote funds to initiatives that would otherwise not be funded and that have a benefit for the local business,” said Mr Smith.

Bosch Australia has around 200 automotive engineers on site, working on projects redirected from other Bosch operations.

“What we’re concerned about is that they are working on projects as directed and as secured elsewhere in the Bosch group and then the work is allocated to us,” Mr Smith said.

“So what we want to be able to do is say, ‘We’ve actually got ideas of our own. We think there is a gap in the market. We think there is a product opportunity and an opportunity for us in terms of growth, expansion of capabilities.’” But he had to play some corporate chess to get the idea over the line. His proposal had to be something that would not otherwise be funded in the Bosch group.

“In the case of trailer safety systems, the division that ought to care about this is chassis controls. They run a big global business,” he said.

“We pitched that we ought to be able to do more for safety systems for towed vehicles, for trailers.

“They said, ‘Yes, we agree, but we don’t have the resources, it’s not a high priority and we don’t have an innovation budget to apply to it.’ Then I was able to say I have a growth and innovation budget.

“So two months ago I said to the engineers who came up with the idea, ‘Come and pitch it and tell us why it’s the right thing to do, tell us why it can’t be funded any other way, and we’ll decide whether it’s worthy of local investment.’ “We were then able to get that approved by the division overseas. ‘You can’t fund it,’ we said. ‘So we’ll fund it locally. Any objections?’ ‘No’ was the answer.” It was at that point that Mr Smith raised the stakes.

“(We then said) ‘Well, we’re only going to fund it if you now give Australia the centre of competence responsibility for vehicle trailer safety systems.’ They were happy to do it.” Mr Smith was hesitant to talk about the products his Australian engineers have in mind, except to point out that any product they come up with will be fitted to the towed unit, not the vehicle in front.

“If it is towed by a 1972 LandCruiser, it doesn’t matter. If it’s a 2015 Viano, it doesn’t matter. We will make sure the trailer is inherently stable,” he said.

Mr Smith gave no indications, but it seems likely the proposed system could be found on caravans, boat trailers and regular trailers.

“We will have a portfolio of products developed over time. The first one will be on market in about 12 months,” he said.

“The portfolio of products will be sold through two channels, OE (original equipment) and aftermarket. There is a whole range of products possible.” The big markets for the proposed trailer safety products are Europe and the US.

He said Australia was an “interesting market” in that it was a place offering easy access to the types of problems that have to be solved.

“But it’s not the place where the biggest volume will be generated,” he said.

Initially, Mr Smith will transfer some engineers from their chassis control work across to trailer safety, but he believed engineers working for other companies would be attracted to Bosch Australia given that it will be the global centre of competence.

The Clayton site will also manufacture some of the trailer safety products.

“We will develop the product here, develop it to the commercialisation gateway, which means we have a validated, tested, saleable product,” he said.

“We will be able to supply a volume from our manufacturing facility here, up to a level. Once it gets beyond that, then we will allocate production to different production plants around the world, depending on where the customers are.

“The other good thing about it is it won’t matter where the products are manufactured or where they are sold, the revenue will still be booked in Australia, even if the product is made in Mexico and sold in the US.” This recognition of revenue in Australia will be important for the local operation as it will reduce operating costs as a percentage of overall income, taking the heat off key corporate measures of performance and giving the local arm some headroom on costs.