Hyundai New Name, New Markets

A TRAILER MANUFACTURING COMPANY owned by a Korean corporation, located in Mexico, and supplied by Americans did some unusual things for today's economic conditions recently.

It expanded its workforce.

And its plant.

And its product line.

The recession does not appear to have struck Hyundai Translead, the border-straddling trailer manufacturing company that has its headquarters in San Diego and its plant in Tijuana. At a time when the overall trailer manufacturing industry has been going through an extremely difficult period, the company has:

  • Acquired two of its outside suppliers, adding 500 people to its employment rolls and significant fabrication capabilities to its manufacturing plant. Employment is now up to 2,400.

  • Retooled its plant.

  • Developed a new plate trailer.

Even the company's name has changed this year. Formerly Hyundai Precision America, the new name was the result of changes in the trailer manufacturer's parent company. The new name, Hyundai Translead, is a blending of the words transportation and leadership. Hyundai Translead is a wholly owned subsidiary of Hyundai Motor Company of Korea, the manufacturer of Hyundai automobiles. Hyundai Motor Company also owns Hyundai Motor America, the company responsible for importing and distributing the automobiles the Hyundai Motor Company manufactures.

Hyundai expanded its workforce in Tijuana by 250 employees in June. Frank Ro, director of quality control, explains that the additional employees are needed to keep track of increases in demand.

“We are now producing between 80 and 90 container chassis per day in this plant,” he says. “That is up well from the first quarter. Orders for our refrigerated trailer are up, too.”

The container figure is noteworthy in view of the fact that the Tijuana plant produced 25,000 containers last year.

Do It Yourself

Until recently, Hyundai outsourced a major portion of its fabricated parts. But the expanded Hyundai plant gives the company the ability to produce 90% of the fabricated components it needs to manufacture a product line that now includes refrigerated and dry-freight containers, container chassis, and refrigerated and dry-freight van trailers. The dry-freight trailer line-up includes a thin-wall sheet-and-post van, along with a new plate trailer design that promises major reductions in the amount of time required to make repairs.

As an ISO 9002 manufacturer recognized by Underwriter Laboratories, Hyundai places a lot of emphasis on quality and control.

“Those are the two main reasons for moving fabrication in-house,” says Garry Shidler, vice-president of production. “By producing the parts ourselves, we can control the process. We know when the parts are going to arrive, and we make sure that they are fabricated to our quality standards.”

Hyundai spent several million dollars acquiring the two suppliers and in setting up its own fab shop within the Tijuana trailer plant. The fabrication department is now equipped with a wide range of CNC machines, including a new cutting table, presses, and a Whitney 3700 ATC punch plasma fabrication center.

“Hyundai has the advantage of being a global company with a lot of resources,” Shidler says. “We have manufacturing facilities around the world and people who are familiar with the best equipment available. When we needed a welder to weld end clips to crossmembers, we had people in this company with robotic welding experience. They knew what to get, where to get it, and how to make it work. When we identified our need for a robot, we had one here in a matter of weeks.”

The company has invested in improvements to its sidewall line and has set up a dedicated production line for the new plate trailer.

Quick Switch

One of the challenges of managing a plant like Hyundai's Tijuana facility is achieving flexibility. A variety of containers, chassis, and trailers all come out of the same location.

“We can convert an assembly line from container to van trailer production in an hour,” Shidler says.

The key is found in the first assembly jig, Shidler points out.

“It's like a die in a press,” he says. “To convert the jig from one product to another, we take out one ‘die’ and put in another.”

Shidler explains that the change has improved quality, enhanced productivity, and made life easier on the worker.

“Every change we make in this plant has to have those three things,” he says. “If we can't improve quality, productivity, and working conditions all at the same time, we won't make the change.”

The new sidewall line is one example of meeting the criteria.

“It is the ultimate in flexibility,” Shidler says. “We can use it to produce any van we make — including drop frames and plate trailers. And we can make the switch from one product to the next very quickly.”

Hyundai has spent about $3 million getting the line set up, but the company is confident it will be money well spent.

Underscoring the flexibility of its plant is the variety of products that come off the assembly lines. One line is designated for van trailers. A second line produces dry-freight vans, refrigerated trailers, dry-freight containers, and refrigerated containers. A third line is set up for van trailers, containers, and container chassis. The remaining two lines are specialized — one for container chassis and another for special projects.

Controlling Quality

With ISO certificates on its wall, Hyundai is dedicated to quality control. The company recently invested in an SAP computer system that enables Hyundai to monitor each step of the process beginning with the taking of the order.

“Every trailer, subassembly, and part has an SAP number,” Shidler explains. “With that number, we can track the status of every unit we produce. It enables us to know exactly how many parts and components we have at all times — giving us real-time inventory.”

According to Frank Ro, quality control begins with vendors. The company sends its own quality control inspectors to visit new suppliers to verify the first articles the supplier provides. This step helps make sure that supplier and customer are in agreement regarding what is being purchased and produced.

The company also has inspectors to evaluate the quality of shipments as they arrive. “If we can check the parts and components early, we can prevent a lot of mistakes,” Ro says.

A quality control sheet with the unique SAP number for each trailer follows the unit throughout the production process. Between 85% and 95% of production makes it through the entire assembly line without a hitch. When something falls short of Hyundai standards, most typically it is due to a bad or missing part or insufficient paint coverage.

“We check each unit with wet and dry gauges that measure paint thickness,” Shidler says. “Each paint job has to meet minimum thickness standards.”

Painted steel components go through a multi-step of prep and finish. Heavy steel pieces are cleaned with abrasive blasting. A primer coat is applied and cured in an oven. Once the prime coat is dried, the finish coat is also applied and then baked. For improved smoothness, Hyundai applies decals while the trailer is still hot.

Any imperfections, however, normally are detected long before the decals are applied.

“Anyone in our plant has the authority to shut down a production line,” Shidler says. “Sometimes we pull products off the assembly line just to make sure everything meets specs. Sometimes we apply static tests, other times we use dynamic testing.”

One way Hyundai believes it has sped its acceptance in the North American market is by the type of specifications it offers as standard equipment. For example:

  • Upper couplers are built to meet Association of American Railroad (AAR) standards.

  • Landing gear also meets AAR standards.

  • Rear door frames of dry-freight vans are protected by a coat of hot-dipped galvanize.

Speedy Plate Repair

Hyundai engineers have been busy developing new products in recent years. The newest is a plate trailer designed for ease of repair.

“Because of the thinner materials used on plate trailers, it's easy for them to show signs of wear,” says Howard Yurgevich, vice-president of engineering. “It's been our goal to come up with a user-friendly plate trailer, one that should appeal to the image-conscious customer who wants to keep his plate trailer looking good without having to spend a lot of time repairing it.”

Hyundai says its new plate trailer will reduce repair costs 50% because panels can be replaced by removing only two rows of rivets.

“Repair shops will be able to repair logistics inserts without affecting the stiffeners,” Yurgevich says. “Or they can replace a plate without affecting the stiffeners. An old panel can be replaced with a thicker one — or a completely interchangeable composite panel.”

Hyundai has produced some prototypes of the design with positive results. The company expects to introduce the new plate trailer shortly.

Other recent product developments at Hyundai include a thin-wall van and an insulated trailer.

“We introduced the thin-wall trailer last year,” Shidler says. “It has been successful — we have sold about 2,500 in a brief period of time.”

The van measures 101" inside, from lining to lining. Hyundai achieves this by reducing the depth of of logistic uprights to .45".

The refrigerated van also is making inroads into the market place. The company just completed an order of 80 for a refrigerated carrier based in Nashville and is gearing up for additional orders that must be completed by year end.

The reefer has aluminum exterior sheets with J-section side posts. A composite bearing sheet at the rear and composite floor stringers have replaced all wood. Crossmembers are spaced on eight-inch centers at the rear four feet of the trailer. This in conjunction with the rear bearing sheet and I-beam aluminum inserts protect the floor from forklift damage.

The Hyundai plant is under the direction of Harry Cho. He began his job as general manager earlier this year, but he brought 20 years experience in the transportation industry with him. He began as an engineer with Hyundai's container plant in Korea before moving on as manager of production. He also has served as senior manager of the quality control department of Hyundai's refrigerated container plant in Korea.

He now finds himself leading three diverse cultures to achieve a single result.

“We have American management procedures, Mexican workers, and Korean ownership,” he says. “My most important goal is to get these three cultures working together, to achieve harmony. We have built a good foundation already.”

Labor Rate

Preconceived ideas about cheap labor are not valid, management believes.

“Yes, the labor rate is less than it is in the United States,” Shidler says. “But we are located near Samsung and other high-tech companies, and we have to compete against them for employees. It's a tight job market here, too, and one that demands higher wages than what many people might think.”

Similarly, the trailer manufacturer uses the same U S suppliers as other North American trailer manufacturers. “It only makes sense,” Shidler says. “If we are going to compete in the North American market, we have to use the components that our customers specify. They want to operate the brands they know and trust.”

In his brief term as general manager, Cho has developed an admiration for the work ethic of the people in Tijuana. Employees work hard while on the job, then run outside when lunch starts. All around the 30-acre site, soccer games are formed, and the play rivals World Cup standards — at least in terms of effort and enthusiasm.

“I see a spirit in the eyes of the Mexican workers,” Cho says. “In spite of our differences, we are brothers and sisters. If we can keep that in mind, we can achieve harmony.”

And build some trailers in the process.

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