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People, knowledge are the 'secret sauce' for sustainable business, Freudenberg exec says

Dustin Walsh covers suppliers for Crain's Detroit Business, an affiliate of Automotive News.

TRAVERSE CITY, Mich. -- Sustainability, in terms of the automotive industry, was a move toward more environmentally-friendly manufacturing and products, and a marketing machine.

But Ted Duclos, general manager of the global fluid power division at supplier Freudenberg-NOK, says it's more than environmental and economical -- it's social.

Duclos, speaking at the 2013 CAR Management Briefing Seminars here this week, said the industry must look inward to its employees, equipment and programs for the capacity to endure.

"If we drove ourselves, we can save more money and create less waste; by using less oil, we can make more precise parts, but it's more than the simple elimination of waste," he said. "Fundamentally, we (the auto industry) don't think about the business enough."

Getting metaphysical, Duclos has charged Freudenberg-NOK with creating "new knowledge."

"Knowledge is a fleeting commodity; knowledge loses value over time," he said. "As a company, you have to be constantly creating and that is the responsibility of the whole business … it's the secret sauce."

While Freudenberg is optimizing its manufacturing process -- transition to more advanced, more productive machines -- that require fewer workers, Duclos said the sealing supplier is investing in its "human factor" and the rest of the industry should join it.

"Improving productivity can be controversial because some argue that the elimination of jobs is counter to respect for people and social equity," he said. "I disagree. When it comes to manufacturing jobs, respect for people should entail meaningful, valuable work.

"When we eliminate non-value-added activities, people are freed to engage in more meaningful projects and work. We engage them in the process and free them to create the value-adding work that we need."

Duclos also touted the company's Travel and Navigate New Exciting Roads program, or TANNER, because the company was founded as a tannery more than 160 years ago. The program sends children and grandchildren of its global employees to stay with other employee families for up to a month across the globe.

More than 800 teenagers have been through the program since its inception, Duclos said.

"This is a family company and we hope these kids look fondly at our company in the future," he said.

Duclos said the company also needs to think more creatively within manufacturing, bringing r&d out of the lab and into the office and floor.

"At the end of the day, as an industry, we need to think bigger," he said. "This is the most sophisticated manufacturing industry in the world, and it's important, and we need to take pride in that."

You can reach Dustin Walsh at dwalsh@crain.com

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