Absmeier will lead the division, called Lear Innovation Ventures Possibilities. He said the unit positions Lear for three objectives: develop a corporate strategy around mergers and acquisitions; establish a culture and mechanism to jump-start new ideas; and provide an r&d arm of the company.
"Ray (Scott) has a big vision for the company, but he needs help getting there," Absmeier told Crain's Detroit Business, an affiliate of Automotive News, on Monday at the Detroit auto show. "That's why I'm here, to help identify the right business models and right places to invest."
Getting out front
The Lear Innovation Ventures Possibilities division is designed to position Lear in front of competitors that may not be looking to startups and new tech companies for inspiration, he said. Monday, Lear announced it had partnered with Techstars Detroit by offering them space at its downtown office as well as serving as a corporate sponsor and on its board.
Absmeier said the partnership will allow Lear to vet new startups entering the Techstars Detroit startup accelerator program, which could open them up to investment or acquisition.
Lear is seeking to grow its $5.5 billion electronics business because there's very little growth to be had in its larger, traditional $15 billion automotive seating business. Commodities and competition significantly limit margins in the seating business. But electronics systems are growing quickly thanks to electrification, autonomous systems and overall more electronics in vehicles.
Lear forecasts growing its e-systems business to $8 billion by 2025, a 45 percent increase.
"E-systems is absolutely our high-growth segment," Absmeier said.
However, Lear might not get there via acquisition, as it's slow-rolling its M&A strategy because valuations are too high, Absmeier said.
In the mobility space, companies like dockless e-scooter firm Bird has a current valuation of $2 billion even though it's not close to turning a profit. Ford Motor Co. paid an estimated $100 million for San Francisco-based e-scooter company Spin in November.
Lear also turned to its own employees to boost its innovation. The supplier is in the process of launching an internal investment device to fund the good ideas of its employees, Absmeier said. Lear is currently taking submissions from employees via its intranet portal.
"We really want to cultivate the process and culture of innovation, so we needed a systematic approach to doing that," Absmeier said. "Establishing that process is really helping present good ideas up (the hierarchy)."
But Detroit auto executives have been sold on the "culture of innovation" by California residents like Absmeier in the past and often those ideas get abandoned during the cyclical downturns of the industry.
The economy is still humming in North America in early 2019, but signs of trouble are emerging. The National Automobile Dealers Association forecast U.S. car sales of 16.8 million in 2019, a drop off from 17.33 million units sold in 2018 and 17.24 million in 2017.
Absmeier said he recognized his division's vulnerability and asked Scott directly during his interview if his vision would be axed at the first sign of economic trouble.
"I joined because of Ray (Scott)," Absmeier said. "He has committed to this and told me they were going to keep innovation sacred. Because Lear has been so financially strong and conservative, I believe there will be more opportunities when times get tough. Ray knows that and knows this is part of a culture shift and that I'm trying to move that needle."