Growing Internationally: Opportunities and Challenges

by Don Johnson
Advanced Technology Services

As Advanced Technology Services (ATS) continues to expand its business in the United States, the Peoria-based company has also turned its attention to creating an international presence. The company’s international business is headed up by Jim Cote, who came to the company with a rich background in international experience from his early career with Rockwell Automation, General Electric and another Peoria-based company, ROHN Industries. Since Cote put the full court press on international business, ATS now has operations in the U.K., China, Mexico and Puerto Rico.

ATS is a very people-oriented business, and the challenges of growing internationally are markedly different than in the U.S., according to Cote. As a critical part of its customers’ global manufacturing strategies and certifications, it is important that its processes are established so that performance and results are consistent across all of its locations in the world. Language, culture and tradition all play a part in how a standardized service is implemented on a global basis.

A Growing Workforce in Mexico
In 2007, ATS established a branch office in Monterrey, Mexico. Growing with both American-based and Mexican companies, its main presence is located in the industrialized Maquiladora areas along the U.S.-Mexican border, with several locations in the Monterrey-Saltillo area. Since beginning operations in Mexico, ATS has grown to a workforce of more than 200 professional maintenance technicians.

“Maintenance in manufacturing is considered a professional career choice in the Mexican culture,” says Cote. “That’s why we see a large number of university-degreed professionals that have chosen a career in manufacturing specific to maintenance activities.” There is an abundance of skilled labor, and the workforce has a very strong work ethic. “The challenge in Mexico,” explains Cote, “is to harness the employees’ enthusiasm into our defined processes for successful maintenance.”

Another area of expansion comes from companies that want ATS’ services to help them relocate to Mexico. According to Cote, Mexico offers some extraordinary opportunities for the company. “More and more, our customers are asking us to expand internationally with them. In fact, we offer a service for those companies to relocate their plants in Mexico on the condition that we take over the maintenance process when the move is complete.”

This new service offering was validated by a recent Nielson Research survey sponsored by ATS. Of the 100 manufacturing executives polled, 44 percent indicated that they were considering relocating their plant to Mexico in the next six months.

In addition to helping Caterpillar plants run better in Nuevo Laredo, Monterrey and Saltillo, ATS works with other top manufacturers, including Honeywell, Eaton and Textron, to help with moving plant operations to Mexicali, Durango and Tijuana. Cote notes that Mexico’s proximity and strong relationship with the U.S. makes expansion there less challenging than some other countries.

The U.K., China and Beyond
In 2007, ATS set up a U.K. office in Birmingham, and the company is now working with Eaton and Johnson and Johnson. Says Cote, “Although the culture and the language are similar, establishing a business in the U.K. can be trying due to the number of regulations and work rules that exist there.” For example, the licensing requirements to do a variety of maintenance activities in the U.K. are quite a bit more extensive than in other parts of the world, including the U.S.

On the other hand, getting started in Puerto Rico, a U.S. territory, was relatively easy. Operating just outside of San Juan, ATS provides maintenance services for a large Eaton manufacturing plant that assembles power consoles for use in high voltage regulators. The staff is comprised of 47 maintenance technicians, including a site manager and site administrator recently relocated from South Carolina.

As in Mexico, the business challenges in Puerto Rico center around language and culture. Fortunately, much of the company’s documentation had already been translated into Spanish from its Mexico operations. In addition, the Mexico team provided significant assistance during the start-up process to help address language issues with the new employees. “One nice thing about Puerto Rico,” Cote says, “is that the island is so easy to get around and the climate is great. So there is never a shortage of volunteers to travel when needed to help out, especially in the winter months!”

But perhaps ATS’ biggest opportunity has been in establishing a regional headquarters in China. “Who would have thought just a few years ago that U.S. companies would be operating so easily in a Communist country—much less ATS?” acknowledges Cote. “Frankly, I have found that the new generation of China bureaucrat is very bright, friendly and helpful. While there were many, many details of our business organization to attend to, the government team that we worked with in China did a great job and made it happen smoothly.”

ATS sees China as a land of great business opportunity, with many of the same challenges facing us here in the U.S. regarding a shortage of skilled labor. This problem provides many opportunities for ATS to help its current US customers as they expand in the China market, not to mention the ability to replicate successful maintenance strategies much more quickly and reliably.

As in other international markets, culture and language are common challenges. “It’s important to understand the nuances of this very polite culture in order to be successful,” according to Cote. “We have hired a local general manager with a lot of experience working with U.S. companies. This has been very helpful in assuring we have a good blend of culture without sacrificing the consistent maintenance processes used in the rest of the ATS world.”

Cote has these final words on the company’s global strategy. “ATS is committed to being a global partner with its large multinational customer base. While current economic conditions may affect some of the anticipated growth in the short term, our feeling is that international business is a long-term investment that is not only smart, but is also a requirement by many of these same companies as they choose to deal with a smaller group of more integrated suppliers.” iBi