1. Scrap Convergence Plan Wuhan lens line #1 Update Feb 5 th Frédéric MORET Feb 5, 2007

2. Property of Valeo – Duplication prohibited January 2005 2 Scrap Convergence Plan – Wuhan lens line #1 Background Wuhan lens line #1 results were:  > 50% scrap rate  < 40% normal capacity since it started in April 2006

3. Property of Valeo – Duplication prohibited January 2005 3 Scrap Convergence Plan – Wuhan lens line #1 Background VLS fast recovery plan  20% scrap rate target by end of Jan 07 for Wuhan lens line #1  Branch coating specialist staying in Wuhan forcing results  No recorded scrap improvement after 2 months  Decision to launch scrap convergence plan on Jan 3 in order to achieve VLS fast recovery plan target

4. Property of Valeo – Duplication prohibited January 2005 4 Scrap Convergence Plan – Wuhan lens line #1 Scope To reduce Wuhan lens line #1 average scrap rate:  From >50 to 20% from February 1 st, 2007  From 20 to 10% from April 1 st, 2007 Include trainings & networking to keep consistent results over time

5. Property of Valeo – Duplication prohibited January 2005 5 Scrap Convergence Plan – Wuhan lens line #1 Latest scrap & production weekly results Close to target before Feb 1st Arrival of Branch team. Reduction of cycle times W2 & 3: Trials & tunings resulting in scrap

6. Property of Valeo – Duplication prohibited January 2005 6 Scrap Convergence Plan – Wuhan lens line #1 Agenda of presentation Step II: Achievements & status  Team, organization & trainings  Capacity  Equipment  Molding  Coating  Inspection Step III: Action plan & expected results

7. Property of Valeo – Duplication prohibited January 2005 7 Scrap Convergence Plan – Wuhan lens line #1 Team Arrival of Branch team in Wuhan Decision for new organization Integration of 2 jig makers 2 people in charge of new T21 jigs Production of W5 totally managed by Wuhan team without any support of Branch team

8. Property of Valeo – Duplication prohibited January 2005 8 Scrap Convergence Plan – Wuhan lens line #1 Organization « Product » APU organization since Sept 1, 2006 People having background to manage lens line Change in organization since Jan 26, 2007 to restore « process » APU structure Champion for lens line scrap reduction Champion for HL assembly Future Champion for lens scrap reduction to be coached by present one

9. Property of Valeo – Duplication prohibited January 2005 9 Scrap Convergence Plan – Wuhan lens line #1 Trainings Trainings done  In meeting room –5 courses Reaction modes for: –Molding defects –Grain defect (varnishing) –Fallen lens & varnish dot defects (varnishing) Inspection –IRIS –Lens inspection –30-35 people attending each time  OJT –5 trainings Supplier for jig manufacturing Production team for jig tuning Production team for molding Maintenance team Quality inspection

10. Property of Valeo – Duplication prohibited January 2005 10 Scrap Convergence Plan – Wuhan lens line #1 Documentation Database  All results & documents related to this plan, including updated action plans  All data related to lens line & its maintenance Booklet  Reaction modes  Working instructions  Main messages of trainings

11. Property of Valeo – Duplication prohibited January 2005 11 Scrap Convergence Plan – Wuhan lens line #1 Organization Further improvements of the team  Coaching of line supervisor by APU manager  Varnishing method engineer position to fill

12. Property of Valeo – Duplication prohibited January 2005 12 Scrap Convergence Plan – Wuhan lens line #1 Capacity Capacity issue because of low « real » TRS Snowball effect  Not enough capacity  No time to improve  More inefficiency 1 st priority has been to recover capacity and to use it for improving:  Reduce injection cycle time (-24%)  Reduce changeover time by installing a fork on press platen (- 30%)  Learn team how to avoid stoppages  Do not accept new product trials which are not mandatory

13. Property of Valeo – Duplication prohibited January 2005 13 Scrap Convergence Plan – Wuhan lens line #1 Equipment No major issue on equipment & maintenance  Haitian press & Wittmann robot –No major issue –Maintenance action plan done: Hot runner heater changed, robot gear changed  Saico line –No major issue –Maintenance globally well done –Maintenance action plan done: 13 improvements, detailed maintenance documents

14. Property of Valeo – Duplication prohibited January 2005 14 Scrap Convergence Plan – Wuhan lens line #1 Achievements & Status Molding  Molds –X11J: No major issue –R23: Small crack issue, solved by team (change in tool) –T21: Silver streak (5%) because of poor design & making of tool, cannot be solved by process, needs a tool improvement (on-going action plan). Design of new tool (expected by end of March) checked.  Operation –Black dot scrap reduced by avoiding stoppages and respect of re- start instruction

15. Property of Valeo – Duplication prohibited January 2005 15 Scrap Convergence Plan – Wuhan lens line #1 Achievements & Status Coating  Jigs –For all: poor making and bad tuning In-feed conveyor: All jigs tuned as well as possible, new jig design tested on Feb 1 st Varnishing conveyor: –X11J & R23: Tuning of jig improved –T21: New design of jig tested, complete new set done, installed on Feb 1 st  Process –No major issue, some flow-coater tunings have been improved  Operation –Bad jig design and tuning results in many door opening (to set lens on jig) and so many grain and varnish dot defects. Improved by team, still possible to improve.

16. Property of Valeo – Duplication prohibited January 2005 16 Scrap Convergence Plan – Wuhan lens line #1 Jig sub-project Design & manufacturing of new T21 jigs as a project  Selection of supplier (8 visited), 1 selected –Good design & manufacturing means, but no autonomy in design & manufacturing  Training of supplier for design, prototyping & manufacturing  Making & test of prototype 1: OK  Making & test of prototype 2 (simplified design): OK  Making of complete set  Installation & tuning of complete set on Feb 1  Detailed manufacturing instruction provided

17. Property of Valeo – Duplication prohibited January 2005 17 Scrap Convergence Plan – Wuhan lens line #1 Achievements & Status Quality inspection & logistics  IRIS –Badly known and implemented resulting in overquality. Training provided, tools updated.  Production quality –Defects badly known by operators. No inspection standard per product. Setting of operator training by quality each 2 weeks. Update of all inspection standards. –Re-organization of line quality, in order upstream quality engineer is now in charge of auditing quality of all actions on the line. –QRAP restarted. –Rules for standard reaction defined (line QRQC). Action plan defined with quality, time schedule to be defined with APU manager and supervisor. –Line management: Display boards re-organized to provide just necessary up-to-date information  Logistics –Use of cardboxes, plastic bags and foam sheets for packaging WIP lenses resulting in many wastes (operator time, footprint, scrap, packaging materials). Was limitating cycle time reduction. Replaced by standard lens plastic totes.  Scrap follow-up sheet (Kosu sheet) –Sheet updated for defect definition (more precise), removal of injection trial shots. Change to be made to remove a mistake in fallen part calculation.  STOP Scrap –Standard display of trend charts and action plans for X11J and T21. Definition of scrap convergence plan actions according to STOP Scrap system.

18. Property of Valeo – Duplication prohibited January 2005 18 Scrap Convergence Plan – Wuhan lens line #1 Step II Main issues remaining on Jan 22  Varnish dot defect on T21 (18% of total scrap) –Only solution is new jig (tested, production of complete set followed-up by Marc Bourgeois)  Grain defect on X11J (16% of total scrap) –Closed door operation (to be followed-up by supervisor)  Silver streaks on T21 (9% of total scrap) –Injection process parameters to be developed by Maxime Hugol  Fallen parts on all products (7% of total scrap) –Robot & jig tuning (to be followed-up by supervisor)  Stoppages, maintenance & changeover delays (5% of total scraps, 40% of productive time) –Short mold changeover device to be used, maintenance & operation management (to be followed-up more closely by maintenance manager & supervisor)

19. Property of Valeo – Duplication prohibited January 2005 19 Scrap Convergence Plan – Wuhan lens line #1 Step II Roadmap defined on Jan 22  W4: Closed door operation for X11J, jig tuning for fallen parts, closer management to reduce stoppage & changeover times  W5: New jig for T21, new injection process parameters for T21, jig tuning for fallen parts, closer management to reduce stoppage & changeover times  W6 & W7: Tunings to decrease rate of other scraps

20. Property of Valeo – Duplication prohibited January 2005 20 Scrap Convergence Plan – Wuhan lens line #1 Step III To reduce Wuhan lens line #1 average scrap rate:  From 20 to 10% from April 1 st, 2007 Definition of action plans in progress 2 nd period of Branch team defined (3 weeks in March)