PACHECO, ARGENTINA — An alliance established in January between Argentine blow molder Masplast SA and a Kautex Textron subsidiary in Argentina clearly portrays how an international automotive player is putting globalization into practice in low-scale economies. To ensure local supply for the new Focus assembly line that Ford Motor Co. is launching in the country, Kautex Textron Argentina srl will provide fuel-tank systems containing monolayer plastic fuel tanks produced by Masplast.
Kautex Textron already supplies to the Focus line in Germany and Spain. In Argentina, the car will begin being assembled in July, with a start-up production of 85 units per day. The total production estimated for 2000 is 7,000 cars.
"Installing a blow molding machine locally is not amortizable with the volume of sales orders the auto industry presents here," Miguel Diguardi, general manager of Kautex Textron Argentina, said in an interview at the firm's facility in Pacheco.
Pacheco is a small town in the metropolitan region of Buenos Aires, Argentina, where Ford and Volkswagen have assembly lines.
In the agreement, the Argentine processor molds the Focus fuel tank using a tool acquired by Ford from Kautex Textron and a Kautex blow molding machine it already possesses. Masplast also machines the tank and welds to it a few components. The set arrives at Kautex Textron Argentina where the unit, air ducts and other parts are mounted and then shipped to Ford's facility.
"The deal was the best alternative to meet Ford expectations in terms of prices," Diguardi said. "If we decided to bring these tanks from our subsidiary in Brazil, it would certainly result in losses."
Diguardi said that Ford recommended Masplast as a qualified local supplier. Kautex Textron Argentina is entirely responsible for the quality control of the fuel tanks and the fuel-tank systems, in accordance with global standards.
Masplast is the blow molding arm of Lodigiani y Leali SAIC, a traditional plastics company in Argentina, which started its injection molding business in 1957.
The group is active in the automotive, packaging, home appliance and furniture sectors, among others.
Together, Lodigiani y Leali and Masplast obtained 84 percent of their sales last year from the automotive industry, and its main clients in Argentina include Ford, Renault and Toyota.
Masplast has a 13,000-square-foot facility in Villa Madero, close to Buenos Aires, and employs 33. It was founded in 1994 and blow molds fuel tanks, filler tubes, pipes and reservoirs.
Kautex Textron Argentina, a streamlined operation located at an industrial building it leased three years ago, has been supplying fuel-tank systems since November 1997 for the VW Polo Classic assembly line in Pacheco.
"In 1998, we delivered 42,000 systems to VW; a year later demand fell to 23,000 units; and this year we estimate that production will total 25,000 units," Diguardi said. "Our forecast for 2000 also includes the supply of systems to the SEAT Cordoba — also produced at VW's Pacheco facility — that began in March."
According to analysts, the auto industry in Argentina this year will produce 350,000 vehicles.
In 1999, production totaled 304,913, and in 1998 it was 457,957, according to data from Asociacion de Fabricas de Automotores, Argentina's vehicle manufacturers' association.
In its relationship with VW, Kautex Textron Argentina's operation basically comprises mounting plastic fuel tanks to air-duct subsystems, both of which are furnished by Kautex Textron's subsidiary in Guararema, Brazil, using other minor components imported mainly from Spain.
"Bringing fuel tanks from Brazil is not profitable, but it's the reality of a global sales order: We provide the Polo Classic platform 120 systems per day in Argentina, whereas in Spain [that] figure totals 1,600 systems per day. We lose money here but make a profit in other parts of the world, and globally, the company is doing well," Diguardi said.
"This situation is also happening with carmakers," he said.
In 1998, Kautex Textron Argentina employed 16 workers. Now, it has only nine people working a single shift, with some spare time available. When the Focus line starts in July, Diguardi expects to run the work shift at full capacity in Argentina and to break even.
Kautex Textron is a division of Textron Automotive Co. Inc. of Troy, Mich.
