Welcome to

1
Local Production
Global Competitiveness

• Welcome to
• NSK STEERING SYSTEMS AMERICAs

2007 Supplier Symposium
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AGENDA Time Topic Presenter 800
825 Welcome / Symposium Theme Kevin Murphy 825
845 Product Engineering Rich Peterson 845
905 Sales Mike Stovall 905
930 Quality Ken Zimmer 930
950 Break 950 1015 Purchasing Deborah
Ireland 1015 1030 Manufacturing Bill
Stone 1030 1045 Supplier Awards D. Ireland
/ K. Zimmer 1045 1100 BREAK 1100
1200 Toyota Presentation/ QA Dave
Nicolle 1200 -1245 LUNCH 1245 130
NSSA Q A Session NSSA Team 130 145 Wrap
Up Comments Bill Berry 145 300 Breakout
Sessions NSSA Team 330 430 Plant Tours
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Meeting Objectives

• Provide update on Market Product Information.
• Encourage more communication to enhance our
  future relationship including management.
• Outline expectations / roles and responsibilities
  
• Recognize the suppliers who have excellent
  quality and delivery performance.
• Share Customer Perspective Toyota Keynote
  speaker Dave Nicolle, Supplier Enhancement
• Obtain your feedback how can we meet the market
  and customer expectations together?

4
Symposium Theme

• Our theme for this years meeting is
  Local Production, Global
  Competitiveness.
• Local Production with Local Sourcing
• Our ability to grow as a steering system
  manufacturer in North America with local
  suppliers is based on a collective commitment to
  provide our customers quality products at
  globally competitive prices.
• Our future business expansion is contingent on
  meeting performance expectations and global cost
  targets.

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Supplier Support / Involvement

• Purchased materials and services account for a
  large percentage of our total cost per product.
  Material costs are increasing with future
  steering column designs.
• We have limited the supplier symposium attendance
  to a select group of suppliers who comprise a
  large percentage of our total material
  expenditures and who have demonstrated their
  ability and willingness to work with NSSA.
• We are still faced with difficult market
  conditions, increased global competition
  requirements for annual cost reductions. We need
  your involvement and support to meet these
  challenges.

6
Supplier Relationships

• Supplier relationships are the key to every
  companys growth and profitability.
• NSSA wants to enhance our relationship with a few
  key suppliers (per commodity) who can help us
  meet current business challenges, for mutual
  benefit and growth.
• NSSA is looking to align ourselves with
  suppliers who can consistently provide excellent
  performance and can help us be more competitive.
• We will reward our best suppliers with new
  business.
• Our role is to foster this relationship. We need
  to increase our communication with our major
  suppliers base over the next year to assess who
  we should partner with on future programs.

7
Procurement Policy 2007
Total Quality No. 1 in the Industry
Strategic Suppliers
Total Cost
Secure Supply
QualityImprovement
GrowthStrategies
Communication Compliance Safety
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NSSA STRATEGIC DIRECTION
VISION BE THE GLOBAL BUSINESS LEADER IN STEERING
SYSTEMS TECHNOLOGY -- THE CHOICE OF CUSTOMERS,
TEAM MEMBERS, AND SUPPLIERS.
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SWOT Analysis Purchasing / Supply Base
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Summary

• SWOT Analysis
• How can we capitalize on the strengths and
  opportunities.
• How can we improve the weaknesses and reduce the
  threats?
• Our companies goals are the same
• reduce costs,
• improve processes,
• increase revenues
• Improve profitability
• secure new business
• meet customer expectations
• We need your commitment to improve performance,
  achieve global competitive costs and win new
  business together!

11
Rich Peterson Director of Engineering
12
Product Line-Up Column
High Rigidity Rake / Reach
Hydroformed Column Reach/Rake
Electric Reach/Rake
Upper Tilt / Telescopic
13
Product Line-Up Intermediate Shafts



Noise Isolating Joints

Sliding Intermediate Shafts
Ball Roller Slider
Collapsible Intermediate Shafts
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Product Line-Up Column-EPS
R/FRack Force
0.66L Brush 30A R/F (4.3kN)
1.3L Brush 45A R/F 4.7kN
1.8L Brush 60A R/F 7.1kN
2.3L Brushless 70A R/F 10.0kN
2.0L Brushless 95A R/F 8.5kN
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Product Line-Up Pinion-EPS
R/FRack Force
1.3L Brush 40A R/F 6.6kN
2.0L Brushless 70A R/F 10.2kN
2.3L Brush 80A R/F 7.6kN
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Future Programs
Simplified Designs More Castings Electric Power
Steering
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Electric Power Steering
FORD ESCAPE Hybrid
TOYOTA RAV4
Toyota Highlander
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What is EPS?

• EPS stands for Electric Power Steering.
• EPS replaces the Hydraulic Pump / Hoses / Valve
  with an Electric Motor, Torque Sensor and
  Controller
• Improvement in fuel economy CO2 emissions
• Easier packaging
• Increased reliability
• Reduces warranty

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Column EPS Basics
Column
Motor
ECU (Electronic Control Module)
Torque Sensor
Rack
Reduction Gear
Intermediate Shaft
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System Operation
Customer steers wheel
Torque sensor determines loading
Controller calculates the required assist
Motor provides assistance
 
Reduction gear amplifies motor assistance
Steering gear converts rotation into rack
movement
Tie rods push wheels
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EPS (Electric Power Steering)

• Torque sensor and controller make the system
  smart - allows the system to communicate with
  other sensors and controllers on the vehicle.
• Computer controller enables variable performance
  based on specific driving situations
• Assist on demand yields higher economy than HPS

22
EPS Comparison with Hydraulic

• Hydraulics
• Engine driven pump, always turning, no P/S during
  engine stall
• Multiple hoses routed within engine compartment
• Multiple connections
• Hoses need to be tuned
• Hydraulic powered rack
• Tuning thru machined valve body
• Variable assist available with flow control
  devices
• Fluid not environmentally friendly

• Electric
• EPS Motor draws power only when assist needed,
  assist available during engine stall
• No hoses, just electrical connections - clean
  assembly, supports modular assembly
• Manual rack
• Wider range of tuning thru software
• Infinitely variable assist
• No fluid to leak or dispose of

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Benefits / Challenges with EPS

• Benefits
• Improved Fuel Economy
• Motor only consumes energy when assist required
• Ease of manufacturing
• No hoses to route and connect, only a few
  electrical connections
• Better steering feel
• Infinitely variable assist
• More reliable
• No leaks, hose routing issues
• More tuning options
• More compatible with alternative powertrains.

• Challenges
• Complicated components and vehicle integration
• EMC (Electromagnetic Compatibility) / EMI
  (Electromagnetic Interference)
• Engine compartment is harsh environment for
  electronics
• Vague customer requirements
• Electrical motor performance different than
  hydraulic pump
• Extended duty usage difficult to specify
• Cost
• Rattle noises

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What EPS is NOT

• STEER BY WIRE
• Steer-by-Wire refers to complete electrical
  actuation of the steering system.
• There is no mechanical connection between the
  driver and the road wheel with SBW
• Loss of power loss of steering without backup
  system
• Sensors determine driver intention actuators at
  or near the wheel control the vehicle
• Electro-Hydraulic Power Steering
• EHPS is a combination of hydraulic and electric
  steering
• Engine driven hydraulic pump replaced by motor
  driven pump
• Fuel economy improvement over HPS, but not as
  good as EPS
• Assembly can be modular
• Hydraulic issues (fluid leaks, noises,
  environment) remain
• Electrical challenges like EMC and current draw
  remain

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Basic EPS Types

• Column Assist Type (C-EPS)
• Generally cheapest
• Rack loads up to 12,000N (C D pf)

• Dual Pinion Assist Type (P-EPS)
• More expensive
• Improved pacakaging over SP-EPS

• Pinion Assist Type (P-EPS)
• Difficult to package, service
• Rack loads up to 12,000N (C D pf)

• Rack Assist Type (R-EPS)
• Most expensive, and heaviest
• Rack loads up to 14,500N (E pf light truck)

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Varieties of EPS
Column Type EPS
Reduction Gear Worm Type Torque Sensor
Contact / Non-contact Type ECU Attached /
Separated Motor Brush or Brushless
Motor Option Tilt Telescope Mechanism is
available
Torque Sensor
ECU
Worm Wheel
Motor
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Varieties of EPS
Single Pinion Type EPS
Reduction Gear Worm type Resin wheel gear for
high temperature Torque Sensor Non-contact
type ECU Attached / Separated Motor Brush
or Brushless motor
Worm Wheel
Torque Sensor
Motor
Rack Pinion
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Varieties of EPS
Dual Pinion Type EPS
Reduction Gear Worm type Resin wheel
gear for high temperature Torque Sensor
Non-contact type ECU Attached /
Separated Motor Brush or Brushless motor
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Varieties of EPS
Rack Type EPS
Co-Axial Rack Ball Screw Type EPS
Ball Screw
Offset Rack Ball Screw Type EPS
Motor
Torque Sensor
Torque Sensor
Ball Screw
Motor
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Key Points for Supplier to NSSA

• Supplier early involvement is critical
• Development supplier has an advantage
• Optimization for cost, manufacturing assembly
• VA/VE design changes prior to design freeze
• Alternate materials processes
• Quote all designs to print . . . BUT . . .
• Quote alternative designs separately with
  detailed exceptions
• Schedule design reviews early with Product
  Engineering
• Point out problems We make mistakes!
• No exceptions at supplier kickoff
• Resolve issues prior to sourcing
• Build it to print/model
• Dimensions, tolerances and specs. are
  non-negotiable in MP
• We will work with you if you have problems
  Dont Wait!
• NSSA values your experience, dedication and
  expertise
• Lets Grow Together!

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Mike Stovall Director of Sales Marketing
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North American Auto Industry

• Auto sales declining due to high fuel prices
  increasing consumer debt
• Big 3 restructuring plans showing some progress
• New labor contracts negotiated with the UAW
• Utilization of global resources platforms
• Successful new products
• Major competitors up for sale
• Delphi Steering Division
• TK considering the sale of Presta
• Due to upcoming CAFE legislation, all OEMs are
  under pressure to increase fuel economy

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Production x 1000
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Customers and Vehicles Served

• Toyota Camry, Corolla, Matrix, Solara, Sienna,
  Avalon, Tacoma, Tundra, Sequoia
• Lexus RX350
• Daimler M / R / GL Classes
• Honda Odyssey, Pilot, Ridgeline
• Acura MDX
• Subaru B9 Tribeca

• Nissan Altima, Maxima, Quest, Titan, Armada,
  Frontier, Xterra, Pathfinder
• Infiniti QX56
• Mazda Mazda 6
• Ford Fusion, Edge
• Mercury Milan
• Lincoln MKZ, MKX
• Pontiac Vibe

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NSSA Customer Engineering Expansion
Toyota Technical Center 150 Million
Investment 400 New Engineers
Suzuki Technical Center 3.7 Million Investment
NSSA Local Engineering Lead Expected!!
GM Technical Center
Hyundai Technical Center 94 Million
Investment 200 New Engineers
DCX Technical Center
Ford Technical Center
Nissan Technical Center 40 Million
Investment 260 New Engineers
Honda Technical Center
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N.A. Market Trend Overview
HPS
12.1M
EPS
15.2 15.3 15.4
15.8 16.3 16.7
16.8 17.0 17.1
17.3 17.5 11 13
14 21 35 48
58 64 66
67 69
Mkt.
EPS
North American EPS Market Drivers Higher fuel
prices - consumer demand for fuel
efficiency Strict U.S. Federal requirements CAFE
standards CO2 emission regulations
Overall EPS Growth 1.6M units are currently in
production. Significant growth during 4 year
period (2011-2015)
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In Summary
The vehicles and customers served by NSSA should
make us YOUR Strategic Customer
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NSK Steering SystemsSupplier SymposiumQuality
Presentation

• December 2007

Ken Zimmer Corporate Quality Manager
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Supplier Performance Score Cards

• QA portion is worth 40
• QPR activity is 30
• PPM is 10
• QPR component consists of
• Ranking
• Repeat problems
• Late responses
• Late closures
• PPM component consists of
• Raw PPM score
• Ratio less than 500 PPM
• Delivery is worth 40
• Commercial Performance is worth 20

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Supplier Performance Score Card
Category
Points

• A Rank QPR
• B Rank QPR
• C Rank QPR
• Repeat Problem
• Late Response
• Late Closure

• 20
• 10
• 5
• 10
• 5
• 5

Score card calculation examples provided in
handout
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Response vs. Close

• Response
• Expected once a complaint or RFI is received
  (typically within 24 hours)
• Should include containment plan
• Should include reaction plan
• Close
• Once corrective action (CA) plan is developed
• CA is implemented and proven effective
• Once NSSA verifies and accepts CA

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Rankings

• A
• Safety Critical
• Shutdown of NSSA or Customer line
• B
• Non conformance resulting "no build" on line,
  detriment to function, or pass thru mating
  characteristic to customer. Requires
  containment.
• C
• Verified non-conformance, but no detriment to
  function. Containment not required

43
Focus Supplier Initiative

• 3 Phase Approach
• PC
• Purchasing
• QA
• Suppliers identified during cross-functional
  monthly performance reviews (Purchasing-Production
  Control-Quality Assurance)
• Detailed focus supplier program in development
  discussion to follow in purchasing presentation

Additional information available
44
Performance Expectations

• Zero Non-conformances
• Responsiveness
• To Quality Issues
• Pre-Notify NSSA of non-conforming product will
  not impact your PPM
• Accurate counts of return material
  sorts affects your PPM
• Audit supplier material of safety critical parts

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BREAK
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Deborah Ireland Purchasing Manager
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Purchasing

• 2007 Performance
• Future Sourcing Outlook
• Purchasing Vision
• Globally Competitive Supply Base
• Low Risk
• Quality
• Delivery
• Expectations

48
2007 Performance Review

• Quality High scores and PPM, repeat issues,
  extra costs incurred by NSSA due to supplier
  issues.
• Delivery Erratic performance in many areas
  (quantity, timing, documentation)
• Cost Global Competitiveness required.
• New Program Launches We successfully launched 4
  major programs last fiscal year. Thank you for
  your efforts and commitment.

49
Localization Opportunities

• Shafts
• Fasteners
• Machined Components
• Motors
• ECUs
• Yokes
• Stampings

50
(No Transcript)
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Procurement Requirements
Best in Class Quality
Communication
Compliance
LEAN ENT.
Globally Competitive Cost
Exact/ On Time Delivery
Risk Management
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Globally Competitive Cost
Review all cost elements to ensure total cost of
acquisition, balanced with risk yields market
defendable material cost
1st Step
3rd Step
2nd Step

• Collect Information
• Supplier Quote
• Cost Estimate
• NSSH Cost
• Key Areas
• Material
• Labor
• Value Add
• Packaging
• Shipping

• Evaluate
• Information
• DDP basis
• What doesnt make sense?
• Supply Base Strategy
• Rationalize
• Localize NA
• Localize near plant
• Dependence

• Feasibility
• Supplier and PE review
• Sourcing
• Report Card
• Risk
• Panel Review
• LOI
• Kick-Off

53
Globally Competitive Cost

• Suppliers who demonstrate global competitiveness
  (Q,C,D ) will have opportunities for growth
• Additional opportunities are available for
  qualified NAFTA suppliers to supply KD components
• Suppliers who source from LCC countries must be
  careful to review quality systems and total cost

54
NSK Competitiveness Model
Raw Material, Currency Energy Cost Increases
Opportunities for new suppliers or increasing
share with NSSA
Eliminate Waste
Annual Price Reduction (APR)
NSSA Cost Management Structure
Competitive Sourcing
Localize /Globalize
Customer APR Demands
Each supplier will be contacted by their Buyer to
review APR performance, New Business
Opportunities, Score Card Results
Value Add/Value Engineering VA/VE
Improve Efficiency
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Risk Management
Assess Supply Risks and Take Countermeasures
1st Step
3rd Step
2nd Step

• Collect Information
• Supplier Audit
• Surveys
• Key Areas
• Financial
• Environmental
• Strike
• Disaster
• Warranty
• Continuity of Supply
• Preventive Maintenance

• Evaluate
• Information
• Classify
• No Risk
• Low Risk
• Moderate Risk
• High Risk

• Action Plan
• Moderate and
• High Risk
• Include Sub-Tier
• Examples
• Inventory
• Contingencies
• Collect more Info.
• Supplier Agreements
• Constant Communication

56
On Time Delivery

• 100 On Time Delivery
• Exact Quantity
• Correct Documentation/ASN

Compliance

• Federal, State and Local Laws
• Environmental Regulations
• Certification (ISO90012000 TS16949etc.)
• C-TPAT Customs-Trade Partnership Against
  Terrorism
• JSOX

57
Communication

• Business Review
• Supplier Assessment and Action Plan
• Score Card Review and Action Plan
• Recent Awards status
• New Business Opportunities
• Supplier Technology
• NSSA Improvements

58
Commercial Expectations

• New Awards
• APR aligned with commodity and program
  requirements
• VE Submission and Feasibility Review
• Current Business
• Cost Reduction as targeted in Business Review
  Meetings
• Include VA implementation
• Risk Management
• Financial analysis (ratios)
• Subtier assessment
• Green Procurement
• Documents provided as requested
• MBE subtier reporting

59
Summary

• NSSA will continue to enhance our relationships
  with capable and competitive suppliers for future
  business and localization initiatives
• Successful suppliers will meet NSSA quality and
  total cost objectives, provide timely responses
  and will participate with Product Engineering in
  early sourcing and feasibility reviews.

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Bennington ManufacturingSupplier Performance
Expectations2008
Bill Stone Manufacturing
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Goals for Benningtons Suppliers PPM QPR
0
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Bennington Manufacturing
Customers Expectation Bennington PPM gt 15
Suppliers Performance 600
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Bennington Manufacturing
This is a Safety System. Many of the components
used in the production of a Steering Column
directly impact the Lives of the Consumers! A
Rank Concerns are directly related to Safety! 1
Concern is too many!
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Bennington Manufacturing
Supplier Concerns are not effectively resolved.
Therefore, Bennington continues to sort or expose
the Customer to the risk of Non-Conforming
Product.
65
Bennington Manufacturing
Supplier Concerns Directly Impact Our Customer
and Bennington Operations. gt Leads to loss of
confidence/business with the Customer
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Bennington Manufacturing
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Bennington Manufacturing

• Bennington Expectations
• Robust Supplier Processes
• Early Warning
• Potential Quality Concerns
• Late Shipments
• Disruptions to Bennington Operations
• Zero PPM
• Zero QPR
• Effective and Verified Corrective Actions

68
Supplier Awards
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Supplier Awards - Quality

• ITW Insert Molded Products
• Madison Kipp
• Netshape Technologies
• THANK YOU!

70
Supplier Awards Delivery

• Advent Tool Mold
• Center Manufacturing
• Dae Yong
• Kenosha Metal Products
• Phillips Moldex
• Wainwright
• THANK YOU!

71
BREAK
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Dave Nicolle ToyotaAssistant General
ManagerSupplier Preparation and Development
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LUNCH
74
QA Session
75
Wrap UpBill Berry, President, NSSA
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Closing Comments

• Improved Supplier Relationships
• Continuous Improvement
• Aggressive Targets
• 2008 Objectives
• Environmental Focus
• NSSA Expansion in North America
• NSSA 20 year anniversary

77
Dyersburg
78
Dyersburg
79
Dyersburg
80
Feed Back

• Please complete the Supplier Feedback Form
• We used your feedback from last year to improve
  this year Thank you!

81
Break Out Sessions

• Product Engineering
• Supplier Quality
• Production Control
• Purchasing
• Plant Tours 330, 430