Jean-Louis Dam: “Belgium’s advantages help JTEKT Torsen grow”

Jean-Louis DAM

Following the crisis, JTEKT Torsen Europe (based in Strépy-Bracquegnies) really took off. The company grew strongly in terms of personnel and production volume, leading to global market leadership in the production of slip differentials for four-wheel drive vehicles. All thanks in part to its crucial location in Belgium.

Anyone who is into sports driving with an Audi, Volkswagen and Jaguar, or who regularly drives their 4×4 over adventurous roads, has no doubt already experienced a lot of driving pleasure thanks to the slip differentials made by Belgian company Torsen. They improve the way a car handles and ensure driving enjoyment and safety.

The company’s approach and innovative business model were recently awarded a Factory of the Future Award 2016, so it made perfect sense for BeAutomotive to race down to Strépy for an interview. “We’ve never had so many options”, says CEO Jean-Louis Dam in this interview.

Not many people would be able to say what Torsen does – and yet you are responsible for the driving comfort of thousands of drivers.

Jean-Louis Dam: “Yes, we provide comfort and safety. Our systems improve a car’s handling and ensure that the wheels maintain their grip on the road in the presence of black ice and water – in combination with ESP and ABS.

Slip differentials distribute the engine’s power separately to the wheels: front and back, left and right.

Our differentials are built into the premium cars made by the Volkswagen Group. We’ve been working for Audi for 25 years. Around 80% of our revenue comes from the Audi A4, A5, A6, A7 and A8, the Q5 and Q7, and the Volkswagen Touareg and Amarok pickup. You can also find our differentials in front and back on the Land Rover and other Range Rover 4x4s.

We’re also now doing development work for other customers, for example for the sport version of the Peugeot 308, 208 and RCZ-R. That’s a small car with a powerful, sporty engine. It has to have great handling.”

Torsen is part of Japan’s JTEKT Corporation. What is your position there?

Jean-Louis Dam: “Within our group, we are small, with 45,000 employees worldwide. In Europe, we are the only ones who make JTEKT’s drive line products. We don’t make them separately from our customers. We do work on the chassis, suspension and steering of the cars that include our component.

We aim to define, develop and produce the product for Europe as a whole. For the United States and Japan we do the gears. We develop and produce the case and housing here.

We’ve developed a technical edge within the Group. That’s why the parent company in Japan is aksing us to continue working on devlopment and is giving us the opportunity to invest. We are a technical centre for multiple technologies, in addition to our function as a plant.”

How much is JTEKT investing in Torsen in Belgium?

Jean-Louis Dam: “In the last six years, we’ve invested an average of €2.5 to 3 million per year, on revenues of €41 million. This year we are investing €1.2 million in R&D.

This means the prospects are good, although we must always remain cautious since we do not know how the market will evolve.”

You have a great combination of R&D, production, test infrastructure, etc. on a single site. Is this combination crucial for ensuring you are prepared for the future?

Jean-Louis Dam: “For us, this combination of technical sales, R&D processes and production is necessary. It is one of the reasons for our current success. These three elements are very important for being able to offer agile solutions.

Fortunately, we’ve been able to retain this variety of departments in Belgium. Because during the crisis of 2008-2009 I had to convince the group to leave R&D here. That wasn’t easy.

Just leaving production here would not be profitable. It has already been amost fully automated.”

JTEKT Torsen Europe won a Factory of the Future Award 2016. What does this mean for you?

Jean-Louis Dam: “This Factory of the Future Award is important for Torsen. It brings us into contact with businesses from other environments that have business models similar to ours. Whether they make furniture, organic bread or diapers, we share our strategic vision, knowledge of our customers, the approach we take and the services we deliver.

These kinds of contacts confirm the decisions I’ve made – and enhance our external profile as a company that works well. This helps when recruiting people and when seeking out new partners. For instance, I gave a speech at the University of Leuven and the response was: ‘Look, it’s possible there too!’.”

What can we expect of Torsen in the short and long terms?

Jean-Louis Dam: “Over the last four years we’ve doubled our volume, and nearly doubled our number of employees.

We are continuing along this path, which involves securing our incumbent market and continually developing new solutions. Accordingly, our biggest job is developing differentials for front wheels and electric and hybrid cars. In electric cars there is a major need for transmissions.

Some developments are nearly ready. While we’re developing others in the medium and long term.

Our core business is gears. Here, there are other things we could improve – for instance the materials and technology used. We are constantly trying to cut weight by using new materials and structures. We’ve got it down to 3.5 kg. Ten years ago, our products weighed 8 kg; two years ago they weighed 4 kg.

We’ve apparently run up against the limits of what we can do with metal and steel. But that’s not a problem. Over the last 20 years I’ve worked here, we’ve never had so much choice in terms of technologies and materials. The opportunities are enormous.”

Carmakers are also coming to Torsen for eco-design and eco-production. What does eco-design mean?

Jean-Louis Dam: “We often wonder how we can make products and services with as little equipment, people and energy as possible. That’s how you come up with something competitive you can offer customers.

Our eco-designs are useful here. Firstly, we are now required to comply with imposed standards. Secondly, our customers are looking for ever lighter and more environmentally friendly solutions. We offer solutions, then we guarante better services for them.

Overall, our energy consumption dropped 52% between 2005 and 2014. By 2020, our target is a 57% reduction. The weight of our products is down 50%.”

Your production process is thoroughly automated, yet you are employing more people today. How do you do that?

Jean-Louis Dam: “Three and a half years ago there were no robots in the production hall. Today, there are no lines without robots. Around 40 robots in all. The number of employees is also up, to around 200. And may even grow further to 250 in the short term due to investments in development and new products.

After the crisis there were only around a hundred people working here. In other words, automation supports our people; it doesn’t replace them. Our people retain power and control over what are good and bad products, what is a good or bad process. They are the ones who improve the programmes for our machines. That is something a robot cannot do itself.

We equip people so they can function properly. Good software, Excel skills and ERP packages. Otherwise, they keep creating paper.

Our mantra is not ‘digital’ just for the sake of it. Instead, we focus on solutions. We use digital and robots to implement the solutions we design.”

How do you see the 180 people on the payroll growing and developing?

Jean-Louis Dam: “It is a challenge to find personnel and partners who can and want to work with us, and who actively monitor this development and contribute to it. Technology is no longer limited. The resources are available. And the materials evolve so quickly.

We leverage the power of people’s creativity and adaptability.

We tell our personnel working here that we are doing everything we can to give them work. We point out that we don’t necessarily know at this time what they’ll be doing five years from now, but that we will always train them to do it.

These days, everything moves so much faster. We do not know which lines and types of products we’ll be making two or three years from now.”

How do you look for talent for further developing Torsen? Is such talent easy to find?

Jean-Louis Dam: “No, finding the right people is not easy. It’s still best to find someone with a good degree, such as civil engineering or a technical skill. But the soft skills are often missing – and they are needed to be able to work in a very agile manner.

Important soft skills are being able to collaborate, reaching consensus and thinking, suggesting agile solutions to customers, and understanding that we are providing our customers with a service, not products. Being able to listen to what the customer says is also critical – because the moment we improve the customer’s business, we’ve won.”

You are investing heavily. Is your location in Belgium an advantage?

Jean-Louis Dam: “Honestly? It’s always hard to motivate a group to do something in Belgium.

We do have the advantage that all major carmakers focus on the domain we are active in. BMW, Audi, Volkswagen are all trying to constantly improve how their cars handle. As a technical specialist, we can help with this.

The second advantage is that automotive is very important to JTEKT. We are the specialist close to European carmakers. The majority of our 30 to 40 subcontractors are located within a radius of 150 km of our company. We work together with all Belgian universities. Very early on we try to establish relationships with good students via internships and theses.

The third advantage is that Belgium is still a favourable location, despite all of the problems. Our people are very agile and very open since Belgium is small. We’re used to understanding other nationalities, such as the Germans, French, English and even Lithuanians. As a result, we’re the only site in our group that can easily confer with Japan, Europe and the United States.

It is very important to speak the customer’s language. We adapt culturally. We are also strong scientifically. Our universities, schools and research centres are very competent.”