Sandro Paparelli: “We got production back to Belgium”

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“Wow, I did not know that these high-tech shock absorbers were developed and made in Belgium.” Kris Peeters expressed his surprise during a visit of Tenneco at the time that he was Flemish Minister-President. And then Vice-President Sandro Paparelli managed to strengthen the position of the company in Belgium even more so.

With a workforce of 1,100 people, Tenneco is currently one of the biggest employers in Limburg. The company develops and produces shock absorbers for virtually all car makes. After restructuring, Tenneco, which is part of a publicly listed US group, has reinforced its position in Belgium once again. “We assemble more and more complete valve systems for our sister companies in Poland and the Czech Republic,” says Sandro Paparelli who is a native of Liege with Italian roots. “Part of the production is even coming back from the Czech Republic to Sint-Truiden.”

Reason enough to interview Sandro Paparelli (M. Sc.), Vice-President & General Manager for Europe Ride Control, for BeAutomotive.

Tenneco Sint-Truiden is the group’s largest European plant, linked to the Research and Development department for Ride Control Products and Systems. How did it get this strong position?

Sandro Paparelli: “Our high-tech products respond to the demand in European automotive manufacturing. American cars are larger, more comfortable and drive at a strictly limited speed. By contrast, German cars were allowed to race along the roads with ordinary shock absorbers and no speed limit. They therefore required high-tech and more sophisticated dampers to prevent the driver from completely losing control of the vehicle. When encountering an uneven surface, the car would keep bouncing here and there, except with shock absorbers which convert energy into heat. Such technology allows them to absorb all the bumps in the road. The more control you want, the more sophisticated the shock absorber should be.

Today, we develop and manufacture shock absorbers for small cars to luxury and sports cars like McLaren and Jaguar. In Europe, Tenneco has a total of 10 sites. Here in Sint-Truiden, we produce 30,000 shock absorbers per day, with focus on passenger vehicles and trucks.

Things are picking up after a difficult period. For instance, 2015 was a record year for the Tenneco Group which produces suspension systems and exhaust systems. In 2016, Tenneco is expecting a robust sales growth. This growth may accelerate in 2017 and 2018 when the new stricter emission standards are introduced in North America and Europe.”

Sports car manufacturer McLaren chose Tenneco as its exclusive supplier of shock absorbers. What does it say about your expertise?

Sandro Paparelli: “Indeed, the car manufacturer McLaren only wants our technology for its luxury sports cars. They now have their own line in our factory. High-tech, only for them. And the shocks work great, as I discovered first hand when invited to drive in one of their cars on a race track. I am not used to driving so fast, and my face turned the colour of my white shirt; it was so exciting. And meanwhile the pilot was saying how fantastically the handling of the car was. But it was a comfortable, high performance drive and always safe.

What is important is not only that we develop state-of-the-art technology for them, but that it is also our own technology which gradually trickles to other shocks. You should know that all models are based on a scalable architecture. For instance, a shock absorber can be upscaled or downscaled according to the car manufacturer’s wishes. Passive or active, without valve, with one or two valves, with or without accumulator, etc.”

What is your most famous product and your latest innovation?

Sandro Paparelli: “We are best known for the Monroe Intelligent Suspension (MIS). Even though Monroe is our 100-year old brand, it is very much alive. We recently reformulated the MIS family. 90% of all new products are developed here in Belgium. Wherever our US shareholder produces a new product, we developed it, as the heart of the Tenneco R&D has been established here in Sint-Truiden for 25 years already.

We also sell a lot of specialised components to our sister companies in Europe and worldwide. 70 to 80% of these components are exported. For example, the daily output of 300,000 small metal parts (discs, sintered components, pistons, etc.) which will be increased to 400,000. Sint-Truiden is extremely important for the group because of that. We developed the competence and sintered components. Incidentally, we are the only shock absorber manufacturer to develop and produce these components in house. The same goes for the valves. In total there are more than 50 different components in one shock absorber. It is becoming more and more complex.”

We’ve noticed that you have brought back part of the production to Belgium. How did you do that?

Sandro Paparelli: “Three things have helped us in this respect: the strong link with R&D; extensive automation in our Belgium plant; and our evolution to produce complex valve systems rather than individual components.

Earlier, production which used to require too many manual operations was relocated elsewhere. More and more high volume production is now coming back to the fully automated line in Sint-Truiden.

Furthermore, it is certainly remarkable that we send far fewer separate components to other plants in the group. We first assemble these parts into complete systems that they can mount on a conventional shock absorber in the Czech Republic and Poland, for example.

This is because shock absorber systems are becoming more complex. They can be compared to a Swiss watch, but at a low cost.

Is your growth accompanied by investments?

Sandro Paparelli: We invested 70 million euro in the last 10 years, with a record investment of 12 million euro in 2015. We are now determining that I should be able and would be willing to invest more. Unfortunately, this is only possible if the government also contributes capital more generously.”

Does the government support companies like Tenneco sufficiently?

Sandro Paparelli: “Good products alone are not enough. You also need the support of your government. This may include providing good technical schools where competent engineers and professionals get qualifications.

The same applies to grants and aid. If the government gave us more money, I would of course be able to invest more here. It’s that simple. Take our Spanish operation where we have invested thoroughly because the government contributed to 40% of the costs.

The government can therefore do more. Yet, it is up to us to find part of the solution.

During the visit of the then Minister-President of Flanders, I found out that we did not communicate enough about our business. The government does not know us sufficiently as a result, and it isn’t aware of our needs and problems either.”

The same applies to the general public which hardly knows about your shock absorbers. Where can we find your high tech?

Sandro Paparelli: “Even though our Monroe brand is well known among car enthusiasts and car connoisseurs, few actually know who manufactured the shock absorbers in their car. A shame because one in four shock absorbers in every car on the road was made by Tenneco. Customers such as Volkswagen, Audi, Ford, Renault/Nissan, Daimler, Jaguar, McLaren,… and another few truck makes, such as Volvo, Scania, Renault, and so on.

Our range includes passive and active shock absorbers. In passive ride control, the damper absorbs the shock of a bumpy road pavement as much as possible. In active ride control, the shock absorber prepares itself proactively for a bump, which makes handling uneveness more efficient. This is growing. Increasingly, Tenneco shock absorbers feature a wire, which enables communication between sensors that read the road and the shock absorber that matches the reading with its response.”

There are 1,100 people working at Tenneco in Belgium, and 29,000 worldwide. Do you find people easily?

Sandro Paparelli: “Today 1,100 people are working here in Sint-Truiden work, including 120 in R&D. This number of researchers is growing proportionally with our activity. This year, for instance, we are planning to recruit 30 engineers in Europe, 10 of whom for Sint-Truiden. This is a lot for us.

10 to 15 years ago, Belgium played a major role in the automotive industry. We were number one in the number of cars produced per capita. Our country later lost its position, which has made it difficult to find automotive engineers. All large technical products are no longer produced in Europe, except for a couple of car makes and aircraft. On average, filling in a job takes 4 to 6 months.

10 years ago we were employing pretty much only Belgians. Now we have to look further and further afield beyond Belgium’s borders. We look for the right people in Spain, England, the Netherlands, Poland, Germany, France, Russia, Iran, Lebanon, Italy, Thailand, India, China, Mexico, etc. This also means that we now have more than 14 nationalities on board in Sint Truiden, making us a global company.

We invest a lot in our people. We want to make sure they are satisfied and believe they are the most important assets of our company. We invest in training courses for all departments, with the aim of working in a more agile and leaner way. These efforts are never enough.

We’d rather cut the marketing budgets than take from our people.”

How do you see the future of Tenneco in Belgium?

Sandro Paparelli: “Promising. 90% of new and complex products are developed here. We then use Sint-Truiden as a launch plant, and in many cases we also do more for the real production. Here, our production is close to R&D, which is ideal when it comes to the complex launch of new products. Their production has to be done in perfectly clean rooms, in a totally encapsulated production line under pressure to make sure dust cannot penetrate. The tiniest dust particle can jam the electronics in the shock aborbers.

We address the disadvantages of higher labour costs, taxes and energy costs through this type of innovation and automation.

Our future is also connected to complex and expensive ride control systems that we will also need in order to work together with the developers of the self-driving car. The suspension system of this new car must react extremely fast and with great sensitivity to what the sensors and cameras perceive on the road surface. This should enable us, among other things, to read a newspaper without getting sick in the car, all of that in a safe environment. Today, we are still five years away from the production of these shock absorbers, which we are calling Acocar. We started on their development five years ago.”