With many top exhibitors out and others reconsidering their involvement in the automotive industry's flagship engineering show, what's a host organization to do?
For the Society of Automotive Engineers, the answer is new features, perks to attract highly sought automaker representatives and efforts to pump up the SAE World Congress even further in 2002. For even though the 2001 show is shaping up to be one of its largest, with more than 1,200 suppliers and manufacturers, many of the industry's top players will not have major exhibits at Cobo Center in Detroit March 5-8.
The defections include Delphi Automotive Systems Corp., Visteon Corp., Budd Co., Continental Teves Inc., Lear Corp., Dana Corp., DuPont Automotive, Faurecia and ArvinMeritor Inc., which had staged separate exhibits before its merger last year.
The departing companies have cited reasons ranging from cost pressures to preferences for private technology shows, where suppliers can share their proprietary products more freely. One company even said it pared the SAE World Congress from its budget in part to prove to its primary automaker customer that it was trimming costs to the bone, said David Amati, director of SAE's professional meetings and activities group.
Indeed, exhibiting at the SAE show is a big part of annual supplier marketing costs, and this year those companies are under pressure to provide still lower-cost parts. The result: thinner profit margins.
Dana, for instance, will save more than $300,000 by pulling out of the SAE show. The Toledo, Ohio, supplier already had paid the $60,000 exhibit rent on its 4,000 square feet of space at Cobo Center, but offered to help SAE by contributing its floor space to minority-owned companies. But even with Dana picking up the rent and other costs, the minority companies declined for financial reasons, spokesman Gary Corrigan said. The show would have cost them less than $30,000. 'But it's a cash crunch for many companies,' Corrigan said.
After consultations with SAE, Dana turned over the space to General Motors, this year's show sponsor, to display new vehicles and concept cars, he said.
Just six of the 40 largest suppliers on Automotive News' list of Top 150 original equipment manufacturer suppliers to North America plan to exhibit this year, according to the exhibitor list supplied by SAE. They are Robert Bosch Corp., Denso International America Inc., American Axle & Manufacturing Holdings Inc., Valeo Inc., Siemens Automotive Corp. and Michelin North America Inc.
Those remaining Tier 1 giants worry about whether the SAE show will deliver the same punch this year. While the absence of some of their biggest competitors could give exhibitors more face time with customers, those automaker representatives also could be in short supply with the show's smaller draw. Siemens, for one, will evaluate the attendance at its exhibit to determine whether the show still meets its objectives.
'If one year the evaluation indicates those reasons are no longer there, and the criteria is no longer met, then we're going to have to make a fiscally responsible decision,' Siemens spokesman David Ladd said.
The departures and concerns about the value of the show are sending a wake-up call to SAE organizers. A number of refinements that have been made for 2001 include:
Space on the show floor was carved out for private technology displays in a feature dubbed Area 51.
For the first time, automaker representatives will be allowed to attend the exhibits free of charge. Automaker representatives attending the technical sessions will be given a discount rate of $200. The full-price rate is $600. Typically about 20 percent of the 50,000 attendees at World Congress come from the automaker ranks, SAE's Amati said. Despite the sizable revenue drop that will result, the move won't threaten the fiscal success of the show, he said.
Shuttle service to bring those automaker representatives to Cobo has been expanded.
About 25 top suppliers that pulled out of the show have been offered more than 200 free VIP invitations each. So far, more than 2,000 registrations have resulted, Amati said.
Incoming SAE President Neil Schilke is heading a task force to come up with solutions to the concerns suppliers have posed. Top executives from supplier companies, including those who pulled out of the 2001 show, are on that task force.
'We're open to create change,' Amati said. 'Even if it's significant change to the structure of the event, we're willing to do that.'
Schilke has even floated the idea of extending the show to a second week and creating days where admission is restricted to the employees of an individual automaker. Initial feedback, though, suggests that would pose a resource drain for exhibitors, Amati said.
Ideally, SAE will look for ways to significantly boost automaker participation and provide more private meeting and display space for exhibitors, he said. That could be within their booths, in an expanded Area 51 or elsewhere in Cobo Center.
But with growing concerns about the value of show participation, the organization must be aggressive about whatever it does, SAE officials and supplier representatives say.
Said Amati: 'What will happen if we don't counteract the potential losses of those companies who aren't there? We're trying to address that.'