M&M, Ford kick off ‘matched pairs’ drive

Murali Gopalan Mumbai | Updated on November 18, 2019 Published on November 18, 2019

Pawan Goenka, President and Executive Director at Mahindra and Mahindra   -  BUSINESS LINE

Auto majors look to optimise synergies

Mahindra & Mahindra and Ford India have kicked off the process of forming ‘matched pairs’ to leverage common competencies.

To put it simply, where someone from Ford is part of a function which is common to his counterpart at M&M, the idea is to see how these skills can be optimised better while working together. “The whole trick will be to get the best of both,” Pawan Goenka, Managing Director, M&M, told Business Line.

This becomes especially important following the announcement by the two companies to team up for a new joint venture in India where M&M will hold 51 per cent. Beyond products, integrating cerebral skills is a key part of the alliance and this is where the ‘matched pairs’ drive becomes critical.

The term, as Goenka added, is something that “we have learnt from Ford” and goes back to a decade earlier when the American carmaker put this concept in place for better alignment between its product development and purchasing departments. The goal was to share a common cost objective and improve interaction with suppliers globally.

In the case of M&M and Ford, ‘matched pairs’ goes a step further in mapping competencies between people from two companies who will now work more closely together. “It is not about Mahindra imposing on Ford what it knows….or Ford doing the same with Mahindra,” reiterated Goenka.

Leveraging common skills

On the contrary, the idea is to see how common skills can be leveraged to the best extent possible. By the end of the day, the top priority is to ensure that the people from both M&M and Ford bond well.

“Finally, it comes down to how well the chemistry between the teams works,” he added.

This, in effect, is the “big intangible in any such measure” and also explains why both M&M and Ford took a good two years to finalise their joint venture since the time they first announced their intent to team up.

The two-year period spent allowed the teams from the two companies to understand each other and take this rapport to the next level in the new joint venture. They were part of nearly six projects covering product development, international markets, sourcing, operational efficiency etc.

“The two years convinced us that we not only have good chemistry at the leadership level but also at the working level,” said Goenka. This was particularly important since good chemistry at the leadership level “will get you nowhere if there is no chemistry at the workers’ level”.

Global Business Services

There are still a whole lot of issues that need to be sorted out on manpower synergies since Ford’s Global Business Services (GBS) will not be part of the joint venture.

GBS by itself has several thousand people on its rolls in India and, as an entity, provides a whole lot of services to Ford both here and worldwide.

As Goenka explained, work is now underway on identifying those people at GBS who will now be part of Ford India and, as an extension, the new joint venture.

At best, this tally could be a few hundred employees of the large pool at GBS and once the transition is done, there will be some kind of consolidation happening on their job functions.

“Most of the movement will likely happen from GBS to Ford India based on who (in GBS) is supporting (Ford India) for what jobs,” continued Goenka. These could include functions like production planning, service support and so on.

Product development is “even more complex” because Ford India does not have resources directly for this space. All work is done by GBS which by itself does not have full resources for product development and, hence, counts on Ford global.

“Right now, we are looking to see how we can identify the resources that are there in GBS doing product development for Ford India and then transfer them over time,” said Goenka.

Published on November 18, 2019
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