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