Big names put Vietnamese startup on the fast track

PARIS — As a kid growing up in New Jersey, Jim DeLuca saw the horrors of the U.S. war in Vietnam played out daily on the evening news.

Now, at 57, the former General Motors executive sees Vietnam as home and the unexpected cradle for a reborn career.

DeLuca is the buttoned-down CEO of VinFast, the fledgling Vietnamese car company that made its global debut at the Paris auto show last week.

In its 16 months of existence, it has proven to be as much about the $3.5 billion automotive ambitions of Vietnam's mighty Vingroup JSC conglomerate as the auto industry's knack for seizing opportunity.

Consider what DeLuca marshaled in putting a gray LUX A2.0 sedan and red LUX SA2.0 crossover on display between the Kia and Ferrari stands in Paris.

The two vehicles are based on BMW technology, giving them similar proportions to the German automaker's 5 series and X5. Powering both is a four-cylinder, 2.0-liter turbo gasoline engine licensed by BMW and adapted to VinFast's specs by Austria's AVL.

Germany's ZF Friedrichshafen is supplying an eight-speed automatic transmission. Vehicle engineering was done by the Canadian-Austrian combo Magna Steyr. The design? Italy's Pininfarina.

The vehicles will be assembled beginning next year at a $1.5 billion, 1.6 million-square-foot plant taking shape in Dinh Vu, near Hai Phong, about 50 miles from Hanoi. The factory was co-developed by Germany's Eisenmann. Schuler supplied most of the stamping operation and Dürr, the paint shop. The engine line relies on FFG and Grob-Werke technology. Switzerland's ABB contributed about 1,200 robots for the body shop.

DeLuca: Pushing ambitious plan

In DeLuca's view, VinFast avoided a lot of risk by taking this course.

"Partnering with individuals who are very good at what they do and have proven track records allows us to develop the product quickly while at the same time bringing up our own internal expertise," he said in an interview here. "We are doing in 24 months what most OEMs do in 36 to 60."

The factory will be able to build 250,000 cars on three shifts. Additional capacity will come from the former GM operations in Vietnam, including a kit plant in Hanoi. They were acquired by VinFast this summer, giving VinFast the distribution rights to Chevrolets in Vietnam.

VinFast’s LUX A2.0 sedan borrows technology from the BMW 5 series.

Don't intimidate

DeLuca spent 37 years at GM. His first factory job was in Linden, N.J.; he later managed a full-size pickup plant in Fort Wayne, Ind. More recently, he ran international quality and manufacturing from Seoul and Shanghai. He retired in 2016 as executive vice president of global manufacturing, manufacturing engineering and labor relations.

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In May 2017, DeLuca posted a LinkedIn essay on the enduring lesson he learned from a "not so good" boss who ruled by intimidation. The takeaway: He needed to manage in a way that made his workers feel good about themselves.

He now has a thousand employees to hone that lesson on.

His executive team has been assembled largely from GM alumni. Some are refugees from GM's defunct manufacturing operations in Australia. Others are from Ford and Fiat Chrysler. There are also locals from Vietnam, where the auto industry historically has meant cars assembled from knockdown kits.

Beyond the sedan and crossover, a VinFast small car is in the works. So, too, are an electric car and bus.

Risks? There are plenty, he says. Quality, reliability and durability will be essential.

And on paper at least, VinFast's ambitions look outsized. The Dinh Vu plant and its capacity to make 250,000 vehicles annually is going up in a market that sold just 273,000 last year.

Exports would be an outlet and are definitely in the plan. But the immediate focus is on Vietnam, where DeLuca says incomes are rising, just 23 people in a thousand own a car, pride is burgeoning around a home-grown automaker, and there's a chance to play a role in amending history.

"So many people — Vietnamese and Americans — lost their lives in that war," he said. "I'm just happy to be here to do something positive on the land that was so devastating to so many on both sides of the fence."

Luca Ciferri contributed to this report.