Delfingen committed to fair globalisation
From family business to world leader: auto parts maker Delfingen bases its success on excellent customer service, agility and an enterprise culture embraced by 2,400 employees in 19 countries.
Solidarity in the genes
A glance at its history sheds light on the strategy of this family-run company based in Anteuil, Doubs (France). “It all started in 1954,” explains Gérald Streit, Chairman of the board. “My great aunt had poliomyelitis. My grandfather knew only too well how difficult it would be for her to find a job, so he simply decided to form a company that could employ her. The new venture started out making PVC pockets for driving licences and other official documents. Our first customer? The Peugeot plants in Montbéliard, less than 25 km from the hangar where Delfingen set up its first manufacturing site. “At the time, PVC was not only very expensive, but it was also complicated to recycle as it produces hydrochloric acid when incinerated. So, my family decided to turn the waste into hoses for the automotive industry.”
From local small business to world leader
As time went on, the company continued to grow and expand into the international market, first producing protective sheaths for electrical wires. Next it moved into designing fluid hoses for the car industry. “In the 1990s, one of our big auto parts customers, Aptiv (ex-Delphi), notified us that they were about to embark on a program to rationalise their suppliers and concentrate their business in the United States. That development set us on the path of acquiring local businesses in 1998 to set up our plants in close proximity to Aptiv’s production sites.” And, to fund expansion in the North-American market, Delfingen issued one-third of its capital in an IPO on the Paris Bourse in 1996.
Agile and nimble
The group now has consolidated revenue of €204 million, with the Americas as our leading market (52%), followed by Europe (35%) and Asia (13%). Instead of working directly with the giants of the car industry, we partner with leading parts manufacturers, like Yazaki and Sumitomo in Japan and Lear and Aptiv in the United States. In a fiercely competitive global market, the race for continuous improvement and innovation is intense. Ever attentive to need at Delfingen, we follow the customer, as we did with Aptiv in the US. The company now has 33 sites around the world and employs 2,400 people. Our main strength? Agility! A major advantage, considering our reach extends to all time zones.
“Working between France and the United States is fairly simple. Internal requests can be answered within the day. But, when it comes to Asia and a time difference of 14 hours, the response time is stretched to 48 hours by the time you allow for the schedules on both sides. All this means that we give our local teams a great deal of autonomy, while the business as a whole is steered from our headquarters in Anteuil, France – which is also home to our Research & Development centre.”
Very agile industrial model
Wherever we are, Delfingen’s culture is open and customer-focused. We organise Tech Weeks at our sites. “This is an opportunity for us to present our product developments and for customers to talk to us about their needs. This back-and-forth is another source of innovation and improvement.” We waste no time once we identify an opportunity. “We can start up a production site with 15 people anywhere in the world within three months.” How? There are two main factors. First is our entrepreneurial culture: we are proactive and decisions are made quickly. Second is our autonomous business model: teams are encouraged to express their opinions and ideas freely in the interests of the company as a whole.
Globalisation in a positive light
The Streit family, which is still the majority shareholder, saw globalisation as an opportunity to improve quality of life for people. In this spirit of empowerment and self-determination, Gérald Streit, CEO of the company until his son Bernard took over on 6 June 2018, founded the Delfingen Foundation in 2007. Equity funded initially, it now has a budget equal to 1% of the group’s annual net income. Here again, we must look to the group’s history to understand our commitment. “Absenteeism was an issue in some of our sites located in emerging economies. When we looked into it, we found that employees were absent to provide support to family members – often because they were sick. Sometimes, the company had to help pay very high medical bills of up to $500, which the person couldn’t meet otherwise. We decided to structure these voluntary initiatives and founded a corporate Foundation. The Delfingen Foundation focuses on four areas: Improving the health of workers and their families; supporting education for their children; facilitating access to private housing by providing micro-loans; and initiatives for the disabled."
Working with the Essilor Foundation
Our Foundation is hugely popular with staff, who have the opportunity to spend some of their working hours giving back to the community. “Most are proud to take part and to have a sense of purpose.” A little over a year ago, a trip to Singapore would change the life of many children. During a stopover, a colleague of Gérald Streit invited him to lunch with a friend who worked for Essilor. The conversation soon turned to the work of their respective foundations. The lunch marked the start of a fruitful collaboration between the two, with very real results. Recently, 300 children of Delfingen employees in the Philippines received a free eye test, with glasses provided for those that needed them – all paid for by the company. The Foundation has also been busy with model education initiatives. We recently celebrated a milestone as the first child of an employee graduated from university. His father, a security guard at the Philippines plant, would never have been able to pay for a college education. “We not only have close links to our customers, but also to our teams and to the local culture. In some countries, just buying a school uniform can be out of reach for people. We take the time to listen and make sure we are in touch with our staff and their priorities.”
Fair profit distribution
We value our employees’ engagement and our shareholders’ trust. In return, we spread the rewards of the group’s growth among our stakeholders. 20% of net income goes to employees throughout the world, without discrimination based on origin or gender. “On average, this 20% equates to one month’s salary.” Similarly, 20% of our net income is paid to shareholders in dividends.
Supporting the growth of a mid-cap
Despite its heft, Delfingen is still a company where our staff in France take their 10am coffee break together. It’s also common for staff to invite some of our customers for lunch in the company to weave even closer ties. “Naturally, some traditions don’t travel, but we do our best to make sure that all our sites embrace our open culture focused on quality workplace relations, according to what works best for their own local traditions.” The company will need all its assets to meet the challenges of the new hybrid and electric vehicle market. “China has lost no time in sprinting to the front of the race to electric, with the largest fleet of electric buses in the world.” Like his predecessors, Gérald is preparing the way forward, cultivating innovation and the company's unique culture. “Cooling electric vehicle batteries is a challenge for the industry, but also an opportunity for our hose products.” Therefore we see future potential for strategic acquisitions, especially in Asia. Delfingen is turning to new partners, like Societe Generale, to help it achieve this goal. “The professionalism of the teams and their worthwhile contribution to our acquisition planning is particularly valuable. Societe Generale has deep expertise in structuring finance at the highest level. I look forward to writing a new chapter in Delfingen’s story together.”