Circle The Wagons

March 12, 2007
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At last week’s 9th Annual Automotive Suppliers Symposium at the Van Andel Global Trade Center, Butzel Long attorney Dan Sharkey opened his presentation with a joke. A man in a hot air balloon yells down to a man on the ground, “Where am I?” When the man on the ground responds with detailed coordinates, the man in the balloon asks him if he is a lawyer.

“Why, yes,” said the lawyer. “How did you know?”

“Because you just answered my question without helping me,” said the man in the balloon.

“Well, I bet you’re an automotive supplier,” surmised the lawyer, correctly. “Because I just met you and you’re blaming me for your problems.”

After nearly four hours of doom and gloom, the assembled speakers came to a surprising, unanimous conclusion during a frank panel discussion: The industry isn’t entirely hopeless.

“Down here in Michigan, it looks pretty bad, but overall, the industry is doing pretty good,” said Neil De Koker, president of the Original Equipment Suppliers Association.

Global vehicle demand should grow at a healthy 3 percent annually until 2012, according to data from another panelist, CSM Worldwide analyst Bob Perkins. By 2019, North American volume alone could hit 20 million units; global volume could reach 80 million in half that time.

“I hope no one walks away from this thinking that it’s all doom and gloom,” Perkins said. “From a supply base standpoint, there really is a lot of opportunity.”

He quoted Toyota’s Jim Presskeynote address at the North American International Auto Show: “Where some people see challenges, other people see opportunities.”

And there’s the rub: Turning challenges into opportunities is easier said than done.

“We are facing some dramatic challenges, and it’s going to be painful unless you prepare for it,’ said De Koker. “There are going to be a lot less suppliers in the future. The ones that survive and thrive will be the ones that are able to meet their customers’ demand anywhere in the world.”

Perkins expects Toyota to overtake General Motors and Hyundai to overtake DaimlerChrysler in global sales in the coming years, but the market should stabilize soon after. It’s little surprise that much of the growth will be in developing regions and Asia — as much as 75 percent of sales.

“A lot of people seem to think the sky is falling,” said Richard Perreault, president and COO of Gill Industries in Grand Rapids. “It’s all about migration and understanding where the industry is headed.”

Terry Nicholas, president of Nicholas Plastics in Grand Rapids, disagreed. He said that that the automotive industry, and potentially the entire manufacturing sector, is in a state of crisis, and may need a federal bailout.

“This country needs to do something to help manufacturing change,” he said. “We can’t survive on knowledge and services alone. We can’t just be the world’s think tank. We need manufacturing.”

On a lighter note, Sharkey shared some good news, “My BlackBerry has been lighting up all morning with a tool that just arrived from China completely worthless. They had to come back to their supplier here on their hands and knees to get it done. All these companies are coming back and realizing that the 11 percent they shaved off the purchase price by going to Asia was a bad investment.”

  • On behalf of the downtown development officials quoted on this page last week, it should be noted that none of the remarks indicated that development in FurnitureCity’s downtown should preclude national retailers, only that it shouldn’t be a priority to attract them.

Also, as the Business Journal does not have the authority to make executive appointments at Rockford Construction, Kurt Hassberger is still COO, not president, as he was mistakenly identified in that passage.

  • Looks like the Midwest isn’t that bad after all.

Site Selection magazine ranked five Midwestern states in the Top 10 of its annual Governor’s Cup competition. The Grand Rapids-Wyoming area finished second in the second tier of the metro competition.

The rankings are based on the number of new and expanded corporate facilities in a region in a given year as tracked by Conway Data Inc.’s New Plant database, and serves as a scorecard for corporate real estate analysts.

Since 1978, the magazine has awarded the Governor’s Cup to the state with most metro areas in the rankings. Ohio won the competition with nine, Michigan was ninth with five.

The general rankings were determined by the number of projects in the region in 2006, defined by a capital investment of at least a $1 million, the creation of 50 new jobs or the addition of 20,000 square feet of new floor space.

With 165 projects, Chicago led all metros areas; Detroit (80) was sixth. Cincinnati (5th, 93) and Indianapolis (9th, 53) also made the Top 10.

For the first time, Site Selection split the rankings by population, producing two additional lists for metro areas with populations of 200,000 to 1 million and with less than 200,000. On the second tier list, Grand Rapids was runner-up with 32 projects. Top-ranked Greensboro-High Point, N.C., had 33.

“This is proof that many of our local manufacturing firms continue to grow and expand,” said Birgit Klohs, president of local economic development group The Right Place Inc.

The top-ranked third-tier region was Auburn-Opelika, Ala.

  • Gun Lake Casino management company Station Casinos, of Las Vegas, was taken private earlier this month. On the flip side, the city of Grand Rapids wireless broadband Internet initiative vendor, Clearwire, staged an IPO.
  • While the Grand Rapids Arts Museum is getting ready to move into its new home at Rosa Parks Circle, Design Plus is having a housewarming at the museum’s original home, the Pike House at 230 E. Fulton St., which it recently finished renovating.

In 1925, long before it took residence in the federal building on

Division Avenue
, the museum launched in this house as the Grand RapidsArtGallery

The home was built in 1845, when the area was completely surrounded by woods and five years before Grand Rapids was incorporated, by Abraham Pike, a former IndianMissionSchool teacher who became a leading trader with strong friendships with the Indian community.

He lived there for 60 years. As his obituary reads, “That spacious old home on

Fulton Street
was the rendezvous for Indians with as many as 30 or 40 squaws, bucks and papooses being housed there night after night.”

Irony alert: Design Plus principal Vern Ohlman is a member of 23 is Enough.    

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