Auto suppliers face unprecedented challenges in North America, but it's not all doom and gloom. Suppliers are expanding, diversifying and innovating as the needs of their customers constantly change.
Automotive News convened its annual supplier roundtable on July 11 to discuss the state of the industry. Taking part were:
- Mark Hogan, president of Magna International Inc., a Canadian auto supplier with global sales of $22.80 billion, operations in 40 countries and 85,000 employees.
- James Orchard, president of North American operations for Faurecia, a French company with $14 billion in global sales. The company makes six primary modules: seating, cockpits, door panels, acoustics, exhausts and front ends.
- William Kozyra, CEO of Continental AG's North American business. Continental is a German supplier with 2005 global sales of $10.32 billion. After its recent $1 billion acquisition of Motorola Inc.'s automotive unit, the company employs about 85,000 people around the world, making electronics, chassis components, tires and industrial products.
- Joseph Anderson, CEO of TAG Holdings LLC, which has four operating companies, three in North America and one in Asia. TAG makes torsion and vibration dampers and some nonautomotive parts. The company posted 2005 revenue of $340 million and employs 400 people.
- Julie Brown, CEO of Plastech Engineered Products Inc., a North American plastics parts maker with 2005 sales of $1.07 billion. Plastech operates 34 plants and employs 7,440 people.
How is business going so far this year?
Hogan: Actually, the North American market is hanging in there for all the doom and gloom that we sometimes hear about, particularly in southeast Michigan. The industry here will probably end up around 16.7 to 17 million units, depending on how you count. Obviously, market share shifts are affecting us all, particularly with the Big 3 companies here - GM, Ford and (the Chrysler group). But nevertheless the automobile business is good, and it's growing rapidly, particularly in Asia/Pacific, where 50 percent of the global growth is going to be over the next 10 years.
Orchard: I agree with Mark. The global automotive business is extremely robust and is predicted to continue to be so. In North America, we don't really view this market as the Big 3 or the Big 2. It's really a market that looks an awful lot like Europe to us in its operation now. I think I have the advantage of being the newcomer on the block. So our challenge in growing in the North American region is really one of managing the strategic growth, picking our opportunities where we can best serve our clients, pick opportunities where we can really add some value to making better vehicles. And if we do that wisely, then we should be OK, and it should be a lot of fun again.