Take BorgWarner Inc. During the recession the maker of powertrain parts laid off 6,000 employees, or about a third of its work force. Since then, BorgWarner has rehired about 3,000 hourly workers, CEO Tim Manganello said.
Now, "If we hit the high-end range of our guidance," he said, "we'll have a record year -- mainly because we lowered our cost structure."
Part of Manganello's optimism reflects what he called steady production levels by automakers in North America and robust growth in China.
In addition, European production is showing a "slight recovery, which wasn't expected," said Heinz Otto, CEO of Behr America. Sales in Europe are soft, panel members said, but production continues to grow because of solid exports from Europe to China and North America, aided by a favorable euro exchange rate.
The suppliers that survived the recession benefitted from a shakeout but don't expect to see more rivals falling by the wayside.
"The economic tsunami really did a good job of shaking the tree, and the dead wood has fallen out," said James Rosseau, CEO of Magneti Marelli USA.
One benefit, said Eric Showalter, CEO of magnesium-casting specialist Meridian Lightweight Technologies Inc., is that suppliers "picked up some business from competitors who went out of business."
But not as many suppliers disappeared as some had expected.
"We had hoped that some wouldn't make it, but some of our competitors are still around," Otto said.
But neither he nor the other CEOs expects more waves of supplier shutdowns.
"If you've survived so far, you've got a pretty good chance of survival," Manganello said.
Credit remains a nagging problem. "Credit is still tight. Ratios are still tight," Baird said. "Banks are still very careful."
Showalter noted that the capital leasing market is "virtually nonexistent."
"If you want a piece of equipment, you've got to buy it," he said. "For a company our size, that has been the biggest change in our credit situation."
As volumes rise, panelists agreed, suppliers' ability to make money will depend on their sticking with the discipline that got them through the recession.
Suppliers have come to recognize that they need to attain profit margins "above 5 percent of sales," Otto said. "In the past, suppliers were OK with 2 or 3 percent."
That means being willing to walk away from unprofitable business, a stark change from prior years when some suppliers accepted low-margin contracts to use their excess capacity.
"We've said 'no' more than we've said 'yes,'" Manganello said. "Suppliers have gotten smarter that volume at any cost is not a smart business model."
Said Rosseau: "We have to manage our business as if we're going out of business."