Walter Aircraft Engines

Hi!

Today we visited Walter Aircraft Engines. Walter is a wholly-owned subsidiary (since July 2008) of GE Aviation, which is a wholly-owned subsidiary of General Electric. This plant is also producing under capacity, but it seemed to be a much different feel than Avia. The manager who gave us the tour (blue shirt in the second picture) is from Ohio and previously held a similar post in Romania. Here are some pictures I took during the tour:



This is the metal as it comes into the factory:

This stores cut metal until the workers need it:

Here are some of the metal-working machines:

These are used to clean and plate the parts:

Here is a disassembled engine (sent in for an overhaul) waiting for new parts:

This is where the engines are reassembled:

This is where they're tested (a prop is attached and the doors are opened):


The most interesting aspects of our visit (in my opinion) were the difference between an acquisition by an Indian company (as in Avia's case) and an acquisition by a U.S. company (GE), and the difference between the Czech Republic and Romania.

While GE sent an American manager over, they didn't use a heavy-handed style with their newly acquired Czech employees. The focus was on the customer and seeking ways to reach common goals within the confines of Czech and GE culture. One example is safety. GE insisted that all employees wear safety glasses and offered to pay for prescription glasses for anyone who wanted them. This is standard in the U.S., but was new for the Czechs and they resisted. GE compromised by identifying areas where safety glasses weren't necessary and these are clearly marked.

Both Czechoslovakia (now the Czech Republic and Slovakia) and Romania were subject to communist rule post-WWII through the 80's. Czechoslovakia had what is called the Velvet Revolution in 1989. It was called that because things went so smoothly; in fact, no blood was shed as the people were ready, and the government was willing, to end communism. Contrast this with Romania, which had a very violent revolution leading to the public execution of Nicolae Ceauşescu and his wife, Elena. Unfortunately, all the Romanians did was cut off the head of the snake (so to speak), while the rest of the snake remained. By this, I mean that all the government/bureaucratic officials who implemented the communist government were left in place. Our host believes this is why the Czech Republic has progressed so much more quickly than Romania in the last 20 years.

It was an interesting visit and I'm sure Pratt & Whitney (rulers of the market Walter is going after with their new engine) will be taking notice soon.

Thanks,
Matt

Avia Ashok Leyland Motors

Hi!

We had our first company visit today: Avia Ashok Leyland Motors. It is a Czech truck maker that was purchased by an Indian company, Ashok Leyland. The plant has a capacity of 20,000 trucks per year, but is currently producing only about 700. Workers are there only three days per week and they are clearly still WAY over capacity. Here are some pictures I took during our tour:









After the tour, we had a chance to speak with a few of the managers, two Czechs and two Indians. The Czechs were the production manager and the human resources manager. The Indians were the procurement manager (local) and a visiting VIP from another site (just got lucky). Here are a few things I learned.

- Czechs like to be managed by Czechs. Before being purchased by Ashok Leyland, Avia was owned by Daewoo. Daewoo sent Koreans to manage all aspects of the company and this was not appreciated.

- Prague does not have a very mobile workforce. In other words, people won't move for a job. The HR director told us that while hiring salesmen, they can really only hire people who already live in Prague.

Here are a few observations that I (and several others in the class) made during the discussion we had later:

- The production manager, who has been with the company for many decades, seems to be nostalgic for communism. He was pretty clear that it was a LOT easier to manage production when they didn't have to worry about planning or sales. They made a certain number of trucks each year that went to the Soviet Union and that was that.

- Avia seems to be dependent on the parent company for any and all strategy. They don't seem to have any kind of strategic goals for themselves. This is a recurring theme as we've heard from others that Czechs (in general) don't seem to think strategically. All the production improvements in the world won't help without a good marketing strategy to increase demand.

It was an interesting visit. It will be interesting to see how AALM does once the financial crisis is over and overall demand picks up.

Thanks,
Matt

Reflection

Hi!

I arrived in Prague less than 24 hours ago. During that time I took a walking tour of the city and shot this photo of a modern building right across the street from a much older (and more typical in Prague) building:



Detractors complained that the building is ugly. Its architect encouraged people not to look at the glass, but rather in its reflection. In this, one sees the beauty of what is around it.

The same is true of people. No matter what we look like on the outside, we are still beautiful if we reflect beauty. The difference is that we choose what we reflect. What's in your reflection?

Thanks,
Matt