KSR INTERNATIONAL

In the 1940s, in a tiny garage in Ridgetown, Ontario, an auto parts maker was born. Today, this manufacturer has become a leading tier one supplier and global exporter of sophisticated auto parts, with sales exceeding $300 million. The firm is KSR International (KSR).

KSR traces its roots to a small manufacturer of tractor hitches established in the 1940s. Two decades later, the firm, then called Kaiser, was acquired by a Michigan company, and management shifted the core business to component manufacturing for heavy trucks. The company was soon restructured, renamed KSR, and guided towards the gas pedal assembly industry. Today, KSR still retains its heritage of industry leadership in pedal design and manufacturing, while making successful inroads in electronic sensors as well.

KSR EmployeesAs a tier one manufacturer, KSR directly supplies auto assemblers. Its key customers are North American giants: General Motors, Chrysler, and Ford, with Ford being the largest. Other household names supplied by KSR include Volkswagen, Hyundai, Land Rover, Nissan, Volvo, and Jaguar.

With seven manufacturing facilities and several supporting offices worldwide, KSR maintains a strong global presence. The company’s research and development (R&D) offices are located in Germany and Canada, with a sales office in Michigan and manufacturing in North America, Asia, Europe, and Latin America. KSR is also exploring strategic alliances in India and Australia.

Sustaining success requires constant vigilance. Vice-president of manufacturing Steve Ross explains that KSR continually tunes its strategy to align with the latest direction in the business environment. For example, when the company discovered that the market for basic sensors was highly saturated, it diversified into high-tech units.

Climbing upward on the intellectual property ladder has become KSR’s primary strategy; this entails creating increasingly sophisticated products that KSR can patent. Since the early 2000s, electronics have been the primary means to sophistication. In fact, KSR’s main product, the electronic throttle control (ETC) pedal, has defined the industry standard for years.

To further enhance its competence in electronics, KSR acquired a U.K. company, Electronic Motion Systems, in 2014. “It’s obvious that our future lies in shrinking our units,” Ross says. In the fast-paced technological world, staying ahead of the game means making a product that is as good as or better than KSR’s competitors, but smaller.

However, simply handing a standard finished product to a customer no longer suffices, , no matter how impressive that product is. Unlike its competitors, Ross says, KSR is reactive to its customers’ needs. Although it stocks standard products, most of its products are custom engineered to customers’ specifications.

While some variant of “putting customers first” now permeates almost every company’s mission statement, KSR shows a true commitment to this ideal, as evidenced by the firm’s tradition of custom manufacturing. Customer satisfaction is also the key reason for continuing to keep KSR’s headquarters in Ridgetown, Ontario, instead of relocating to China. Management know that KSR’s current customers value physical proximity. If honouring that customer preference means foregoing China’s low labour costs, then it is a price worth paying.

WHEN ASKED ABOUT THE ONE THING THAT WOULD HELP KSR ATTAIN EVEN GREATER SUCCESS, ROSS INSTANTLY REPLIES: “PEOPLE.”

The company’s pivot to electronics in recent years only required a slight skill upgrade for the majority of its workers, most of whom who work on the shop floor. The main challenge, Ross admits, is attracting highly skilled workers with university degrees. As the company grows, engineers (and particularly electronics engineers) are essential.

For now, there seems to be a solution to this need for talent: recent layoffs at BlackBerry Limited have allowed for an outflow of human capital to talent-hungry small and medium-sized enterprises. For KSR, the concentration of available electronics engineers came at an opportune time, and the company raced to open a new R&D facility in Kitchener to attract these available workers.

To meet its ever-increasing demand, KSR is also adopting more proactive hiring practices, which involve venturing farther afield for job fairs and campus recruiting events; for example, KSR’s engineering manager recently attended a job fair in Windsor, Ontario for the first time.

Moreover, the company is exploring partnerships with educational institutions. For KSR, these partnerships serve the dual function of attracting promising university students and achieving synergies in R&D. Ross reports that KSR is currently developing a system for low-pressure natural gas containment in collaboration with a technical university. In addition to the company’s focus on putting customers first and pursuing advanced technologies, this is the kind of partnership that will ensure KSR’s growth for years to come.

Learn more about KSR International by visiting their webpage.

Company Profile

Company Description

Overview

KSR is a Tier 1 manufacturer of automotive parts, specializing in automotive sensors, electronic throttle controls, adjustable and fixed pedals.

Key Facts

Headquarters: 95 Erie Street South, Ridgetown, ON N0P 2C0

Other locations:

  • R&D Engineering: Halifax, NS; Laatzen, Germany (and sales); Kitchener, ON
  • Sales: Southfield, MI; Scunthorpe, England; Shanghai, China; Brasil;
  • Manufacturing: Rodney, Ontario; Mexico; China; Czech Republic; England

Executives:

  • CEO & President: Craig Arnold
  • VP Manufacturing: Steve Ross

Year established: 1940s

Number of employees: 1900, 450 at Ridgetown site

Revenues: 300 Million USD

Line of business

Automotive parts: NAICS 33639

Products

Electronic sensors, pedals, brakes, and electronic throttles.

Markets

Customers: Mainly Ford (40%) but most major automotive assemblers, including including Chrysler, General Motors, Continental/Teves, Donghee, Fiat, Hyundai, Isuzu, Jaguar, Kia, Land Rover, Magna, Mazda, Nissan, Fisker, Volkswagen, and Volvo.

Exports: North America, Europe, Latin America, Asia; exploring strategic alliances with Middle East and Australia.

R&D, Skills and Educational needs

Employees: engineers, shop-floor workers, high-skilled positions, many previous RIM employees.

Education: colleges in Chatham, Windsor, London; difficulty finding skilled university graduates in electronic engineering.

R&D: future in intellectual property, electronics, automation.

History

In the 1940s, KSR made hitches for tractors. It was acquired by a Michigan company in the 1960s and made components for heavy trucks. KSR was then dissolved and entered the pedal assembly industry.

Competitive Environment

Competitors

Saturated market for their more basic products, hence shift to electronics.

Partnerships

  • No formal partnerships with local educational institutions, but does recruit from nearby ones
  • Difficulty finding local people with requisite skills (esp. electronics) – windfall of skilled former RIM workers
  • Partnership with Texas A&M on low pressure natural gas R&D
  • Government R&D funding helpful, but regional government was obstructive for their construction of a new facility

SWOT Analysis

Strengths:

  • Custom-engineering, reactive to customer needs
  • Quality: design, engineering and manufacturing done in-house

Weaknesses:

  • New to electronics/elevated intellectual property (IP) products

Opportunities:

  • Foray into electronics/higher IP

Threats:

  • Large auto firms who in-source

Performance

Recent Developments

July 2014, acquired Electronic Motion Systems, electronics supplier with development in Halifax and manufacturing in Wales, strengthening core competency

Awards

Dresden industrial facility named “2014 Industry of the Year” by Chatham-Kent Chamber of Commerce.

OTHER PROFILES