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SAE hopes to bring back Tier 1 suppliers

'Area 51' scrapped, prices for exhibition space lowered

A new leader
Raymond Morris will become executive vice president and secretary of the Society of Automotive Engineers on Jan. 1.

Age: 59

Key jobs: SAE, joined staff in 1974 as publications advertising and marketing manager; Pannier Corp., Gard Division general manager; Pittsburgh Society of Association Executives, past president

The Society of Automotive Engineers hopes to lure Tier 1 suppliers back to the SAE World Congress next spring by offering lower exhibition prices and greater security for proprietary technology.

But the show still will be successful if large suppliers don't return, said Raymond Morris, incoming executive vice president of SAE. Morris, 59, is replacing Max Rumbaugh Jr., 63, as the chief staff officer of the 80,000-member professional society Jan. 1. Rumbaugh is retiring after holding the job for 16 years.

"The show has gone through evolutions," Morris said. "There used to be OEMs that exhibited, and they kind of went away. Then Tier 1s came in. It's likely to be that the show in the future is going to be more Tier 2s and 3s and 4s, more small companies. The show will continue to be a prosperous and important event."

The exposition hall at the SAE World Congress reached its zenith in the latter half of the 1990s. Tier 1 auto suppliers, bolstered by the boom in auto sales and vested with greater product development responsibilities from automakers, built large, flashy displays - some costing more than $1 million - to tout their wares to engineers, giving Cobo Center an auto show-like ambience.

The balloon burst prior to 2001, when many of the large Tier 1 suppliers, including top-ranked Delphi Automotive Systems Corp. and No. 2 Visteon Corp., pulled out of the exposition, citing high costs and a low turnout of engineers from the automakers. Robert Bosch Corp. has said it won't have a booth at the 2002 show.

SAE countered this year by offering Area 51, a group of small, private display area that suppliers could rent to show technology away from the prying eyes of competitors. But fewer than 10 companies used the area.

SAE's plan for the 2002 show is to scrap Area 51 and replace it with prefabricated technology villages that allow suppliers to display parts already on the market in the open, while keeping their proprietary technology in a concealed rear area off limits to the competition.

Morris said SAE officials are calling on Tier 1 suppliers and pitching them on the new concept. Prices range from $5,000 for a 100-square-foot space to $25,000 for 600 square feet. The area is completely assembled, furnished and outfitted with electrical outlets. All the supplier has to do is stock it with parts and staff it, Morris said.

So far, no Tier 1 suppliers had reversed their decision not to display at the show, but Morris is hopeful some will. "There seems to be interest," he said.

Some suppliers remain wary.

"You don't want to put your best stuff out there, especially if you are a company that is defined by technology," Siemens VDO spokesman Dave Ladd said. "To show your proprietary technology is to say to a competitor, 'Here, take my lead.' "

Siemens VDO is still scheduled to exhibit at the 2002 World Congress, but Ladd said the company is re-evaluating whether it will stay in the show.

Changing market

The idea of private display areas runs counter to SAE's traditional role of expanding the sharing of technology. But Morris said the concept of technology villages is one way SAE will do a better job addressing its members needs.

"We need to be more in tune with why people feel they aren't getting the value they need and then deliver something for them. Our hope is we could say to Tier 1s that for $25,000 you can come in and have a presence. And you don't have to worry about being competitive because the (technology villages) all look alike," he said.

"SAE is all about shining a light on things, offering (technical) papers everyone can benefit from and allowing the world to see technologies. It's a bit out of our normal practice to say now we are going to develop things that keep things secret. But if that's what's needed to help Tier 1s, we are happy to accommodate them," Morris said.

American Axle & Manufacturing Holdings Inc., a Tier 1 supplier that plans to display at the 2002 show, won't bring any proprietary technology. Company officials feel the show, even with its limitations, is worthwhile.

"Our reason for displaying prominently is that SAE is a very important venue, essential in communicating to our customers and others our technological capabilities," said Carrie Gray, director of marketing for American Axle.

Don Ableson, executive director of special vehicle activities for GM, said the show is essential for engineers to attend, even if they don't get to see the latest technology from suppliers. The technical presentations, he said, offer "an outstanding way for an engineer to be brought up to date on what's happening in industry and what's happening overseas."

Other improvements planned

Morris, a 27-year SAE veteran, plans to address another gripe heard after last year's show: Not enough automaker engineers, purchasing managers and platform managers attended.

SAE officials plan to visit automaker executives to explain key events at the 2002 show. A letter-writing campaign targeted to automakers will encourage engineers to visit the show.

Morris said SAE plans to provide free bus transportation from automakers' sites and free show admission for manufacturers' engineers. Morris said many engineers stayed away because of parking hassles.

Said Morris: "The key message has to be that we are listening and we are responding. Maybe we did that too slowly in the past. But my goal is to be much more in tune with what's going on in the Detroit community and to be more personally involved in that."

You can reach Richard Truett at rtruett@crain.com

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