Global providers of turnkey original coating systems and plants for the vehicle industry, Geico and Taikisha, have announced the formation of the Taikisha Geico Global Alliance.
Taikisha acquired 51% of Geico’s shares from Gecofin, while Gecofin is expected to hold Takisha shares “within a year,” according to the companies. Ali Reza Arabnia remains the chairman, president and CEO of Geico and its associated companies. The companies say the alliance promises to enhance the capacity of both to serve their global customers in the automotive industry. The partnership also brings together a wider customer base, allowing Taikisha to focus on serving vehicle manufactures located predominantly in Japan and Korea, while Geico focuses principally on serving those headquartered in Europe and America. Geico has strong ties with local partners in five countries through its allGeicoProject.
Significant growth is expected by both companies from vehicle manufacturers headquartered in emerging markets – in particular, China, Brazil, India and Russia, where they have been active.
The merging of skills and technologies such as Geico’s J-Jump, J-Flex, Dryspin dry scrubber and Taikisha’s Integrated Air Shield, E-DIP will strengthen the Alliance’s offerings to clients, according to the alliance.
“Through the Alliance, Geico will give its customer base the financial and structural confidence they always seek before assigning their complete paint shop projects. Moreover, together with Taikisha we will enhance our innovative nature and global strength to offer the most advanced technological solutions with world class manufacturing capabilities,” says Arabnia.
The Italian firm has set global benchmarks in the field of paint shop design, analyzing both the painting process and the paint shop as a global integrated system. Geico’s technologies enable the company to install paint shops with a 30% reduction in environmental impact when compared with existing facilities, and with a 10% of renewable sources. Many of the eco-friendly solutions were developed together with its customers. A number Geico’s solutions can also be retro-fitted. These include a programmable rotating dipping system called J-Flex, the modular handling system J-Jump, the compact aluminum booth called Amir and the wet and dry scrubbers called Hydrospin and Dryspin.
Geico is also certified by the British Standards Institution (BSI) and its quality management system with regards to regards to design activities, the supply and installation of painting plants and systems for environmental protection, is in compliance with ISO 9001:2008. The company prides itself on being a leader in the greening of paint shops.
Geico evolved from the Italian division of Carrier-Drysys, a pioneer in original coating plants for the vehicle industry. It acquired Drysys’s and Haden’s (Carrier-Drysis’ successor) global patents and international trademarks in 2008. The company has benefited from a policy of continuous research, development and innovation, and has built up a reputation for technical expertise, design skills and effective project management.
Based in Japan, Taikisha, is principally engaged in the design, supervision and construction of air-conditioning and painting facilities. The company operates in two business divisions – Environmental Systems and Painting Systems. The Environmental Systems division offers general air-conditioning facilities for computer rooms, offices, schools, hotels, stores, research institutes, theaters, halls, hospitals and residential homes, as well as industrial air-conditioning facilities for clean rooms in factories that manufacture semiconductors, electronic components, precision machinery, pharmaceuticals, foodstuffs and films.
The painting systems division provides the painting facilities for factories that manufacture vehicle bodies, bumpers, railway vehicles, construction vehicles and airplanes. The company was founded on April 10, 1913. It was listed on the second section of the Tokyo Stock Exchange in October 1974, and transferred to be listed on the first section of the Tokyo Stock Exchange in September 1980.
According to Arabnia, the alliance between Geico and Taikisha will exceed all of the major critical expectations of their customers. “These expectations include sustainable size, financial stability, competitive solutions in timing and pricing, vertically oriented technology organization, a global infra-structure, an innovative approach to in product development and project management, and ecological and energy saving development”.
Automotive asked Arabnia what the reasons were for forming the alliance, and what value it added to the Geico business model.
Arabnia: Size! Size! Size! Since the re-acquisition of Geico from Comau in 2005, the biggest problem we have faced is a misconception that we are a small company, and therefore not financially fit for big jobs. This misconception was in total contrast with the reality because Geico was, and remains, very healthy financially. The company is truly specialized for complete plants and not for minor works. The Alliance with Taikisha puts us in a position to be part of a US$1.5 billion conglomerate, and therefore solves this issue once and for all. Taikisha’s complimentary technologies and global facilities are also important reasons for the Alliance.
AI: Will the Alliance open up a more global market for Geico into the emerging and BRIC markets?
Arabnia: Of course! Through Taikisha, we’ll have access to more than twenty new locations around the world. Through its allGeicoproject, Geico has already created an important presence in the BRIC markets, but through the Alliance, this will be tremendously enhanced. We will have better access in other areas such as Europe and the US.
AI: How will the alliance affect your global procurement model?
Arabnia: It will have quite a large effect on the model. Our purchasing power will be greatly improved as well as our costs and value engineering. We have created specific operational workshops that are already sourcing alternative solutions and merging our knowledge and skills to increase our competitiveness. This will ensure that our customers receive the best quality solutions with the lowest possible investment.
AI: What are some of the advantages/benefits that the Geico Taikisha Global will bring to the customer base in terms of the product offering?
Arabnia: Geico has developed a flexible and programmable rotating dipping system for PT-ED, called J-Flex, which can be used by Taikisha. In addition, Taikisha have developed advanced application and automation solutions that can be used by us. There are also common projects between the companies such as dry separation of overspray that could help the alliance develop the best technology on the market.
AI: What are the challenges of forming such an Alliance?
Arabnia: Any alliance needs time to work smoothly. I had personal experience in my previous business life where I had to integrate several companies from different parts of the world. I am aware of the risks involved with putting different cultures together in the same team. However, once you make people feel comfortable, and show them that they are not in competition, the opportunities become by far more evident than the possible risks. The process needs to be governed by open and honest communication, and it should be appreciated and understood by the customers and other stakeholders.