Gillette Supplies Information

April 5, 2004
Print
Text Size:
A A
GRAND RAPIDS — Jim Gillette, director of supplier analysis for CSM Worldwide, considers himself a kind of hybrid academic.

He’s always been a learner — somebody with a real thirst for knowledge, he says.

He’s had a passion for economics, and the forecasting and business analysis it involves, since high school.

CSM specializes in forecasting and information services for the automotive industry.

Services include industry forecasts, supplier risk analysis and due diligence for credit analysis and mergers and acquisitions, among others.

Early on in his career, Gillette worked for an insurance agency and then took a job as a medical photographer for the former Blodgett Hospital.

The latter led to a position as director of audio/visual services for GVSU. After receiving his MBA in 1981, Gillette worked a couple years as a strategic forecast analyst for Amway Corp., followed by six years as a corporate economist for Foremost Insurance.

In 1988 he joined an East Lansing consulting firm, where his major client was General Motors. 

“That kind of launched me,” he recalled.

Two years later he went to work for IRN Inc., a nationally known consulting firm serving the automotive supplier community and other industry groups.

Gillette spent 13 years with IRN, beginning as a strategic marketing consultant for the GM’s automotive components group and later as vice president of automotive forecasting.

He joined CSM Worldwide last year. 

CSM, he said, is the leading provider of automotive forecast services in the world. The company has clients on every continent and offices on every continent, with the exception of Antarctica.

“If you want to participate in this business today you don’t have to supply in every corner of the world but you have to have people on the ground. You have to know what’s going on.”

Gillette and Mike Wall, CSM manger of forecasting analysis, established the CSM Financial Services Group last November.

The financial services division provides global automotive industry advisory to commercial, investment and merchant banks, private equity firms, investment analysts, turnaround specialists and accounting firms.

CSM opened a Grand Rapids office last week on Charlevoix Drive to serve its growing client base here.  

These days, Gillette spends the majority of his workday researching, writing reports and putting together presentations. 

“I enjoy digging into something deeply and having people ask me questions about it. I really enjoy having the knowledge and helping firms acquire and use that knowledge.

“Today 57 million light vehicles are built around the world. It’s a really complex industry and it’s huge. Just to provide information to everybody that supplies an industry as to what’s being built where and who’s going to build what and who’s supplying whom is an enormous task.”

In addition to automotive consulting, for the past 22 years Gillette has taught undergraduate and graduate courses in finance part time at Grand Valley State University’s GVSU’s Seidman School of Business. 

Gillette has a long history with GVSU, where he earned a B.S. in sociology with a minor in economics, and an MBA with a concentration in finance. He met his wife there, as well.

“One of the great things about teaching is that you learn a lot more about the topic,” he said. “Having the teaching experience has helped me in the consulting business quite a bit.”

The 1950s and 1960s were phenomenal decades for automotive industry suppliers, he said. Suppliers had basically three customers — Ford, General Motors and Chrysler — and everybody made money.

Today the Big Three would love to get 4 percent or 5 percent operating margin returns but it’s very difficult to do.

“It’s so cheap to buy an automobile relative to anything else,” Gillette said. “Cars are a very good deal today because everybody through the whole food chain has cut their profitability right to the bone. You’ll find very few suppliers that are widely profitable anymore.”

It used to be that the Big Three consistently captured 70 percent of the North American market share.

Today, Gillette said, they’re struggling to maintain 60 percent of that market. A 10-point drop in market share is the equivalent of eight assembly plants, he pointed out.

Manufacturing constitutes only 15 percent of the nation’s GDP now, he pointed out. What’s really creating wealth in the United States is intellectual property, he said.

The process of manufacturing high quality, high-end automobiles with high content form is going to stay in the United States, he predicted.

“You’ve got to do something where you contribute engineering, design or some sort of special content. That’s where the returns are.”

If anything is going to bring down the automotive industry in the United States, in the short run it’s going to be the cost of health care and retirement, he said. 

“What we have in this health-care issue is something that is, in my belief, beyond being solved by the private sector. It’s a horrendous burden.”

In Gillette’s opinion, the Big Three didn’t stand up to the UAW like they should have in negotiating the most recent UAW contract. In 2007 another UAW will be coming up and the situation is going to be more critical.

“There’s going to be more market share loss, and the Big Three will have less capability to finance that amount of additional capacity.

“The health-care issue is just going to get worse. So we’re going to have to have some changes on that.”

Recent Articles by Anne Bond Emrich

Editor's Picks

Comments powered by Disqus