The Hindu Business Line : Companies see benefits of team work to navigate crisis

Chennai, Feb. 20 Whether it is Caterpillar Inc, a manufacturer with a presence in 50 countries, Thermax Ltd, a leader in the domestic market, or Consolidated Construction Consortium Ltd (CCCL), a fast growing infrastructure company, all see traditional values, team work and customer focus as important factors to tide over the difficult times ahead.

But their views diverge on market protection — bad idea says Caterpillar. Maybe, but inevitable if governments have to support industry, say others.

The industry representatives were addressing the MMA Annual Convention 2009 on the theme: Navigating Uncertain Times.

Caterpillar Inc, which estimates it could see a 20 per cent drop in business as compared to sales of over $50 billion in 2008, believes team work will be key to growing sales, apart from technological advancement and quality.

Mr Kevin R. Thieneman, India Country Manager, Caterpillar Asia Pte Ltd, says as customers in any segment of industry focus on growing the top line and controlling costs, industries are looking at efficiency improvement to keep costs down.

Apart from technology and material, the company’s workforce is critical to growing sales. Caterpillar is increasingly working with a focus on team building — in 2004 the employee engagement was estimated at about 60 per cent and last year it had grown to 80 per cent.

Finding opportunity

Mr M.S. Unnikrishnan, Managing Director, Thermax Ltd

Companies need to aggressively explore new opportunities in energy, materials and markets, Mr Thieneman said. Caterpillar has seen significant business in ‘remanufacturing’ — refurbishing used equipment. Nine of its 10 products come back for remanufacturing and Caterpillar has recycled over 3 billion pounds of iron. This makes for a huge conservation of resources.

Access to markets is becoming difficult as governments provide sustenance to their industries and want to support domestic industries. “Isolationism does not work,” says Mr Thieneman. Investments come down, jobs will be lost and it will drive a downward spiral, he said.

Mr R. Sarabeswar, Chairman and CEO, CCCL, says the company is increasingly focussing on honing the skills of its employees. In a buoyant phase when attrition was at 4 per cent the company had relatively less control on the staff. But with attrition now down to less than 1 per cent, CCCL is investing in skill development and efficiency improvement. Over 30 per cent of the salary is now linked to performance.

Fiscal stimulus, tax cuts and rebates, and Government spending on infrastructure will help the industry tide over the coming year. CCCL is concentrating on its core strength in construction and focussing on infrastructure project in the absence of private sector projects in industry.

Mr M.S. Unnikrishnan, Managing Director, Thermax, said that the manufacturing sector is not likely to grow in 2009-10. Consolidation and retaining customers will be key focus areas. The push will be on protection as Governments start supporting their own industries.

India too will have to protect its market and ensure that others do not dump products here. When Governments provide a support package for domestic industry it is also logical that they insist that the benefits are targeted at home rather than elsewhere, he said.

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