June 23

Development of the TRW Automotive Chassis Strategy

Throughout Victor Rice’s time at Lucas Varity, every business unit was transformed into a market-leading position. The prime areas of business being brake systems, diesel systems and aerospace systems. Where this was not possible the business unit was sold, usually at premium prices. As a result, the value of the group had increased seven-fold in five years.

Even so, the automotive industry continued to consolidate and the vehicle manufacturers were looking for super-tier 1 suppliers who could provide not just complete brake systems, but total chassis solutions for instance. In May 1999, Victor sold the whole of LucasVarity to TRW inc for $7 billion. The new group had a turnover of $20 billion and majored in automotive, aerospace, space and defence.

The key rationale behind the acquisition was the creation of a fully capable ($6 billion turnover) chassis systems supplier that combined Lucas Varity’s braking systems business with TRW’s steering and suspension business. I was given the role, by TRW’s CEO – Joe Gorman, of leading the Chassis Transition team and creating a Chassis Systems strategy.

The challenge was enormous – just the technical integration involved bringing together 2,500 steering and suspension engineers with 1,500 braking systems engineers. The atmosphere was politically charged as the business structure was still to be determined. The strategy that I created had to be very rigorous to counter all the critics who lost out in any forthcoming reorganisation.

Additionally, the automotive industry had become increasingly cost-competitive as the vehicle manufacturers sharpened their purchasing teeth. The engineering teams were already over-committed to stretched delivery programmes and it was difficult to make room for chassis solutions thinking.

The transition team had representation from sales and marketing, engineering, technology, purchasing and each major territory around the world. The strategy covered our market and competitive position, financials and our disposal, mergers and acquisition plans, industry trends such as globalisation and vehicle module integration.

Technology Roadmap

Technology is a key differentiator in the industry and so we developed a comprehensive technology and product roadmap. The roadmap helped define the critical product platforms for cost-effective chassis development.

At the time, the vehicle manufacturers were wrestling with the management of complexity and so we simplified their task by breaking the vehicle down into simpler modular assemblies. A complex chassis system could be broken down into smart corner and cross member modules that included the actuation, structures, sensors and electronics leading to a “lego” type vehicle build. In South America, we even delivered entire rolling chassis in partnership with Dana.

The major shortcomings that the strategy had to address: was the development of the right chassis solutions, a weak TRW balance sheet after the acquisition of LucasVarity and relentless price cuts across the automotive industry. TRW sold the Diesel Systems business to Delphi Automotive; they sold their aerospace arm to Goodrich and their Space and Defence business to Northrop Grumman.

TRW Automotive was spun out as a separate $12 billion company on Wall Street under my old boss John Plant. As far as I can ascertain from press releases and product launches, TRW Automotive is still progressing with my Chassis Strategy and are still number one in the Automotive Chassis industry 5 years later.

After completion of the strategy and transition duties, I was made Technical Director for Chassis Systems. However, I did not see the role through, three months later I handed in my notice. I had been hard-driving for 12 years in the industry and had travelled “long haul” virtually every week for the past three years. It was time to move on and spend more time with my family. The headhunter’s offer from De La Rue plc to relocate to the South Coast of England, to change industry and become Group R&D Director was irresistible.


business strategy, technology roadmap

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