Annual auto suppliers symposium here Thursday

March 3, 2012
| By Pete Daly |
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“Fasten your seatbelts” is a message representatives of West Michigan automotive suppliers will hear Thursday morning at the 13th annual Automotive Suppliers Symposium at GVSU in downtown Grand Rapids.

“You are about to enjoy this ride, as opposed to the other ride when we were going down” at the onset of the Great Recession, said Mike Wall, an economic forecaster at IHS Automotive, a worldwide consulting firm with offices in Detroit and Grand Rapids.

Wall is one of several experts who will speak at the symposium, which is presented by the Van Andel Global Trade Center at GVSU. The keynote speaker is Jeffrey L. Moyer, vice president of business development and engineering at Meridian Lightweight Technologies Inc.

Meridian is a magnesium die casting company that successfully launched the auto industry’s first magnesium engine cradle in 2005. Based in Strathroy, Ontario, Meridian has seven manufacturing facilities worldwide, including one in Eaton Rapids, and one of its business development/engineering offices is in Plymouth.

Magnesium is one of the lightest metals and has long been used in aircraft and motor vehicle components to keep weight to a minimum.

Moyer, who also serves as chairman of the board of advisors for the School of Engineering & Science at the University of Detroit Mercy, will speak on the topic of “Beyond the Recovery: Opportunities and Challenges.”

The theme of the symposium this year is “Calibrating for Success,” which means adapting to the new demands on the auto industry arising from high oil prices and increasing fuel efficiency requirements by both the federal government and consumers worried by the increase in gasoline prices. “Lightweighting,” in fact, is the newest auto industry buzzword that will be repeated more than once Thursday morning.

Technological advancements will also figure in the discussion, particularly power train technologies for increased efficiency.

Another economic forecast will be presented by James E. Glassman, managing director and senior economist at JPMorgan Chase.

Industry panelists will include Stephen R. Koets, global director of market development at Pridgeon & Clay Inc.; Eric Lambert, senior vice president/CFO at Mill Steel; and Brian Tucker, global business development manager at Alcoa.

Wall said the auto industry “has been anticipating, waiting for that snap-back effect, and this is probably going to be the year we really start to feel that.”

He said, “We are looking at about 14.4 million units of light vehicle production in North America this year,” compared to production of 13.1 million units in 2011. “That’s some nice growth,” he added.

February was a great month for the U.S. automakers. GM sales were up very slightly, but Wall said it is still good because GM output does not compare easily to that of one year ago. Ford sales for the month increased by 14 percent, and Chrysler reported a 40 percent increase over February 2011, selling nearly 134,000 new cars and trucks.

Some caution is advisable, however.

“When we have a strong growth trajectory like we do now, it’s bound to bring in more volatility,” said Wall. He said as suppliers struggle to keep up with increasing orders from the automakers, there is a potential for “stock-outs” — inadequate supply of parts — in some areas of the industry.

Access to capital will be another issue, with Glassman no doubt fielding some questions from the floor.

“We need to have availability of working capital” as orders increase and suppliers expand. “We need to have loan availability for fixed asset improvements,” said Wall.

Plante Moran is the title sponsor of the symposium. Rich Antonini, managing partner of the Grand Rapids office, predicted there will be “a lot of optimism” reflected at the meeting. New design and engineering will be the nuts and bolts of the dialogue, according to Antonini.

“With the emphasis by the automakers for lighter, stronger, more fuel-efficient vehicles, we think the timing of this session is perfect,” said Antonini.

The automakers “are daily talking about how to take weight out of their vehicles — to a point of daily gram reduction — to be more fuel efficient,” he said, yet they must also balance that with maintaining performance and quality.

“They look at every component and every part of the vehicle,” he added, “(which) demonstrates the need for suppliers to come alongside the auto manufacturers and help them find solutions. Research, development and design are as critical now as ever for an auto supplier, and clearly many suppliers in this region understand that, and have been able to win work because they have been willing to invest in these costs to help position them for success.”

“Auto suppliers in this region seem well positioned for the growth expectation in the U.S. auto market, and our hope is this session will share further insights on this market,” he said.

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