The auto industry has been good to Richard Crawford. Over the past eight years, his Cambridge Industries Inc. has grown from one factory with sales of $4.5 million a year to 15 plants with $400 million in sales.
But as the 50-year-old CEO looks out across the industry landscape, he has a concern: Where will he find the managers to keep that ball rolling?
'I spend a lot of my time trying to find good people,' says Crawford, whose firm supplies plastic interior components, primarily to North American automakers. 'The key to our growth in the future is going to be having the personnel who can make it happen.'
Crawford's thoughts are shared across the industry. Suppliers are facing an era of new challenges. Supplying parts across automakers' vehicle platforms means operating on different continents. That means working with overseas partners, buying and operating foreign factories, and managing overseas sales organizations. Industry consolidation means moving quickly into new businesses, and rapidly developing design and engineering capabilities.
The problem is, those are new demands for many small- and medium-sized suppliers. They require new skills that many firms have not developed.
Even the biggest suppliers aren't immune. Robert Oswald, chairman of Robert Bosch GmbH's North American unit, has said the biggest burden of rapid growth is the stress on the management team.
As a result, suppliers are looking for managers who can lead them into the strange new waters of international business. They need executives capable of merging business units and running design shops. They need operations managers with foreign language skills and sales personnel who understand engineering.
The fast growth at Cambridge alerted Crawford that he needed proven management support to run his own company. Last year, he hired away Kevin Alder, vice president of operations from another fast-growing supplier, Magna International Inc., to become his second-in-command. Alder, 39, had also earned stripes with Johnson Controls Inc. and Textron Automotive. Alder would effectively run the day-to-day affairs of Cambridge, freeing Crawford to focus on the company's strategic growth.
Bringing executives out of one company into a top position at another is no longer uncommon. The move also helps spread the knowledge of various products at a time when automotive companies are merging and expanding into new fields.
But the bigger challenge now may be in finding management support with a head for international operations.
Michigan Search Plus, a Farmington Hills, Mich., executive head-hunting firm, reports that managers with overseas experience, and especially foreign language skills, are commanding a premium. Unfortunately, notes Search Plus President Christy Greeneisen, the pool of such candidates is not big. Except for the industry's major multinationals, few U.S. auto-parts makers have large, seasoned overseas staffs to draw from. That has caused many automotive employers to cast a wider net, Greeneisen says. Companies are turning to older job candidates - perhaps 55 years old instead of 45, she observes. Echlin Inc., for example, this year hired Larry McCurdy, 61, as its new president and CEO. He left the company as its president in 1985.
In some cases, firms are choosing international experience outside the auto industry - recruiting from the consumer appliance or tool industries.
Earlier this year, global seating supplier Lear Corp. adopted a novel solution to its changing management needs. Company President Robert Rossiter moved his presidency to Lear's international operations office in Germany. From there, Rossiter will oversee the supplier's business outside North America.
For Cambridge, 'having experience in an international arena just wasn't much of an issue for a company like ours five years ago,' notes Crawford.
Cambridge is attempting to buy a part of Goodyear Tire & Rubber Co.'s Jackson, Ohio, plastics business, as well as Owens-Corning's Brazilian plastics business. About $50 million of Cambridge's sales will go to non-U.S. automakers this year, including a contract to supply BMW AG's plant in South Carolina through a joint-venture partner in Germany, and another contract to supply a world platform for Freightliner Corp. in conjunction with a Korean partner.
'Ten years ago, you didn't have to support your customers in Europe or Asia,' Crawford says. 'Today, you've got to be everywhere they want to launch that vehicle. You not only have to have somebody who can understand what the customer is trying to do, you've got to have people who understand those markets.'
Breed Technologies Inc. President Johnnie Breed was busy looking for such a person in early May in Detroit. Breed flew in from the airbag and steering wheel company's Lakeland, Fla., headquarters to interview two people for a newly created senior engineering position. She got what she wanted: a candidate who speaks German and who demonstrates an understanding of European culture.
'When an American bothers to learn a foreign language, it says to me that he has an appreciation of that culture,' Breed said afterward. 'If you understand the culture, you understand what motivates people there.'
For the Florida supplier, the need is doubly acute. Breed has been on an explosive globalizing drive over the past two years - accumulating 11,000 employees worldwide and sales of $430 million last year. But at the same time, the company's strategy is to leave its overseas operations in the hands of local management.
'We're a global company,' explains Breed. 'I don't want to put an American over an Italian organization. And I don't want an American back at the home office trying to manage the Italian operation.'
That means that Breed must not only find executives with global experience and vision - it must find them outside of the United States.
The top issue
Yet, that might not be as difficult as it once was, says Jim Mateyka, vice president of A.T. Kearney's automotive consulting practice. A new Kearney study of European firms reveals that managers there are now more willing to jump from one company to another. That could help U.S. firms just arriving on the scene, Mateyka says.
More striking, the study found that 'personnel' was the No. 1 issue among the companies it interviewed - of more concern than globalization, products and even cost.
Kearney, an international consultancy with an executive-search subsidiary, reports that firms are embracing two new strategies to deal with the changing concerns:
First, some companies are bringing human resource decisions into the home office rather than leaving them at the field office. That means that a young operations manager in Brazil who is proving himself will quickly catch the attention of executives in Chicago or Detroit.
Second, says Mateyka, some suppliers are beginning to rethink the structure of their 'overseas operations.' Instead of linking markets by geography, such as Asia-Pacific, they are combining them into 'clusters.' Suppliers might group the management of slow-growing emerging countries in one cluster, mature markets in another, and fast-growing start-up markets in a third.
That might mean linking Indonesia and Iran together, or Brazil and China. Though the languages are different, the business experiences are more alike, and managers can transfer what they learn between similar markets, Mateyka says.
Meanwhile, companies are already expressing desires for a different kind of management material to colleges and engineering schools. Dave Doherty, vice president of international and government activities for GMI Engineering and Management Institute in Flint, Mich., says the industry executives on GMI's board of directors are pressing for more emphasis than ever on international operations. GMI specializes in turning out auto engineering graduates capable of running the industry's plants. GMI is currently working out a plan to offer its degree through a network of European universities. That, Doherty explains, would bring a decidedly international flavor to the industry's technical job pool.
At the same time, GMI is now offering foreign language services for the first time. Although language is not part of the manufacturing management curriculum, GMI has established an arrangement with the Berlitz Language Centers for interested students who want a foreign language. Doherty reports a rush of interest in German, Spanish, Chinese and Japanese.
Automotive News Staff Reporter Lindsay Chappell is based in Nashville, Tenn.