Automotive News - Traverse City - August 6, 2019 - 1

CAR MANAGEMENT

TUESDAY

autonews.com

BRIEFING SEMINARS

®

DAILY
AUGUST 6, 2019

THE BUZZ

A summer
of new
trends

Sometimes you don't notice a
major trend until it's on top of
you and all around you.
"Things are happening," is
often the
best
observation
a person
can muster
amid the
daily
hurricane of
work.
That's one
LINDSAY
of
the
CHAPPELL
reasons for
NEWS EDITOR
this annual
conference,
now in its 54th year. The
Management Briefing Seminars
were created to bring far-flung
engineers and executives
together to compare
observations. And that's why its
value has always been the
sprawl of its topics: economic
outlooks, manufacturing
innovations, political worries,
labor issues, trends in
electronics and tooling.
Based on conversations I've
had with some of this year's
speakers, you can be prepared
to hear at least about these
three macro trends:
1. A new cost squeeze is
coming. Sales are soft, profit
margins are thinning. And for
various reasons, such as the
addition of tariff costs, supply
chains will be pressed to get
leaner and cut overhead and
product prices.
2. AI is coming at us like a
tsunami, and everywhere at
once, including: factory shop
floors, vehicle cabin cameras,
supply chain management,
machinery maintenance,
vehicle safety systems,
autonomous steering systems.
Automotive companies will be
rushing to digitize.
3. Lighter, lighter, lighter. You
may think you know all about
lightweighting. But the industry
is just getting warmed up as
automakers press for more gains
- driven increasingly by nonU.S. market issues. You're going
to hear about material advances
that will make the pounds melt
away. Listen for this week's new
bonus word: Float.
You may email
Lindsay Chappell
at lchappell@crain.com.

Entire contents © 2019 Crain Communications, Inc. Use of editorial content without permission is strictly prohibited. All rights reserved.

Magna tackles tariffs as it transforms
Changing factory plans is a new phenomenon

A

Michael Martinez
mdmartinez@crain.com

s Magna International prepares its business for tomorrow, it's been forced to
reckon with challenges that threaten
the bottom line today.
This year, it scrambled to move wire harness
production from China to Thailand after the
Trump administration slapped 25 percent tariffs
on Chinese goods. And company officials say
they've been forced to consider moving production of other components.
A spokesman said Magna estimates tariffs on
Chinese goods could cost it $34 million this year.
"It's had a definite impact," Chief Marketing
Officer Jim Tobin told Automotive News ahead of
his Thursday presentation here. "It's in our dis-

you're meeting expectations of investors,"
Tobin said. "How do you make sure we
have balance on the returns of today as
cussions with our customers and we're
we're investing in tomorrow - and that totaking localization into consideration."
Tobin said much of the uncertainty
morrow, in some cases, we don't have a
around trade could be resolved with the
good feel for when it's going to materialpassage of the United States-Mexiize."
Tobin said Magna is committing significo-Canada Agreement, which he's
cant investment into lightweighting, adhopeful could be in place by the start of Tobin: More
next year. Magna has been in close spending on tech vanced driver safety systems and other r&d
areas in autonomous and electric vehicles.
communication with the Office of the
He said Magna intends to spend $100 million more
U.S. Trade Representative over aspects of the
on r&d this year than it had planned, with much of it
deal including regional value content figures.
going into developing new technologies.
"We're hoping it will come through to a fair
The company is also aggressively targeting partconclusion," Tobin said.
But even when Magna gets relief on trade and
nerships and alliances to help control costs. In Chitariffs, the company faces the uncertainties of inna, Magna has entered a joint venture with BAIC to
build EVs there. It will be producing vehicles in a
dustry electrification and automation.
plant outside Shanghai in 2020, Tobin said. m
"You have to make sure at the end of the day

JOE WILSSENS

Breaking the ice

Attendees renew old acquaintances and make new ones during the welcome reception Monday. Seminar sessions kick off Tuesday morning.

Suppliers' standing at risk, new study warns
Deloitte: Electrification will lead to commoditization

S

Larry P. Vellequette
lvellequette@crain.com

upplier executives, beware: You might
soon get commoditized.
The global industry transition to electrified propulsion will render many companies secondary suppliers in the next few years as
automakers increase reliance on complex electric
systems with fewer outsourced parts, a new global
automotive supplier study from Deloitte argues.
The coming shift in vehicle sourcing will require
supplier executives to take a new, hard look at what
roles they are prepared to play in the supply chain.
The consulting firm's fourth annual Global Auto-

motive Supplier Study, to have been released Monday, recommends that supplier executives realistically examine whether their businesses operate in
growing, stagnant or declining product segments.
With automakers investing heavily in electrification, autonomy and other mobility trends, suppliers need to think strategically, said Neal Ganguli,
Deloitte's U.S. automotive supplier practice leader
and one of the four authors of this year's study.
"We believe what suppliers need to do is really
take a look at their product portfolio and figure
out, 'What does this mean for me? There are
pieces of my portfolio that probably need investment for growth, there are pieces of my portfolio

that potentially are stagnant and or declining,"
Ganguli told Automotive News.
The strategies to successfully navigate each
segment are different, he said.
"If you're playing in a stagnant segment," Ganguli said, "go for skill, go for consolidation, go for
cost leadership and efficiency. Somebody is going to consolidate that market, and it's just that
it's going to be a commodities market."
The strategy will be different depending on
whether demand for a company's product is
likely to grow or decline in the face of electrification, he said. And suppliers that serve multiple
segments will want to narrow their business focus, as companies such as Visteon and Aptiv
have done, Ganguli said. e

lll

INSIDE THIS ISSUE
n LMC Automotive's Jeff Schuster
says sales look flat and the risks
are rising in the global vehicle
market. I PAGE 21 I

n MEMA's Ann Wilson expects
help for suppliers, automakers
from the new North American
trade deal. I PAGE 22 I


http://www.autonews.com

Automotive News - Traverse City - August 6, 2019

Table of Contents for the Digital Edition of Automotive News - Traverse City - August 6, 2019

Automotive News - Traverse City - August 6, 2019 - 1
Automotive News - Traverse City - August 6, 2019 - 2
Automotive News - Traverse City - August 6, 2019 - 3
Automotive News - Traverse City - August 6, 2019 - 4
Automotive News - Traverse City - August 6, 2019 - 5
Automotive News - Traverse City - August 6, 2019 - 6
Automotive News - Traverse City - August 6, 2019 - 7
Automotive News - Traverse City - August 6, 2019 - 8
Automotive News - Traverse City - August 6, 2019 - 9
Automotive News - Traverse City - August 6, 2019 - 10
Automotive News - Traverse City - August 6, 2019 - 11
Automotive News - Traverse City - August 6, 2019 - 12
Automotive News - Traverse City - August 6, 2019 - 13
Automotive News - Traverse City - August 6, 2019 - 14
Automotive News - Traverse City - August 6, 2019 - 15
Automotive News - Traverse City - August 6, 2019 - 16
Automotive News - Traverse City - August 6, 2019 - 17
Automotive News - Traverse City - August 6, 2019 - 18
Automotive News - Traverse City - August 6, 2019 - 19
Automotive News - Traverse City - August 6, 2019 - 20
Automotive News - Traverse City - August 6, 2019 - 21
Automotive News - Traverse City - August 6, 2019 - 22
Automotive News - Traverse City - August 6, 2019 - 23
Automotive News - Traverse City - August 6, 2019 - 24
https://www.nxtbook.com/nxtbooks/crain/an3435609782TWTKL_supp
https://www.nxtbook.com/nxtbooks/crain/an2737646517HKDWS_supp
https://www.nxtbook.com/nxtbooks/crain/an2746596872HIAJD_supp
https://www.nxtbook.com/nxtbooks/crain/an4955867723FWRSS_supp
https://www.nxtbook.com/nxtbooks/crain/an1326535475LMTIM_supp
https://www.nxtbook.com/nxtbooks/crain/an3887461294KHGFY_supp
https://www.nxtbook.com/nxtbooks/crain/an3245837562PLINN_supp
https://www.nxtbook.com/nxtbooks/crain/an4756684734HIGTK_supp
https://www.nxtbook.com/nxtbooks/crain/an8475647221RWSTS_supp
https://www.nxtbook.com/nxtbooks/crain/an4475637112TIGSM_supp
https://www.nxtbook.com/nxtbooks/crain/an4472236451GHTLT_supp
https://www.nxtbook.com/nxtbooks/crain/an8875623549CBWAF_supp
https://www.nxtbook.com/nxtbooks/crain/an2713984755IBPIT_supp
https://www.nxtbook.com/nxtbooks/crain/an2365889566CBASA_supp
https://www.nxtbook.com/nxtbooks/crain/an2713985847ISTTW_supp
https://www.nxtbook.com/nxtbooks/crain/an9826351139SHNKT_supp
https://www.nxtbook.com/nxtbooks/crain/an4239576129HTSKA_supp
https://www.nxtbook.com/nxtbooks/crain/an4859867123HPGMF_supp
https://www.nxtbook.com/nxtbooks/crain/an9875632144BLASA_supp
https://www.nxtbook.com/nxtbooks/crain/an5948576134HMTFC_supp
https://www.nxtbook.com/nxtbooks/crain/an4958670126PBWGM_supp
https://www.nxtbook.com/nxtbooks/crain/an9384756453JBFPW_supp
https://www.nxtbook.com/nxtbooks/crain/an8395756432AMIHC_supp
https://www.nxtbook.com/nxtbooks/crain/an9405856762CSFLS_supp
https://www.nxtbook.com/nxtbooks/crain/an3873120954AMTCW_supp
https://www.nxtbook.com/nxtbooks/crain/an8097364512SITPF_supp
https://www.nxtbook.com/nxtbooks/crain/an3478925478LIALS_supp
https://www.nxtbook.com/nxtbooks/crain/an9894756324SSFTL_supp
https://www.nxtbook.com/nxtbooks/crain/an5847323487AICCS_supp
https://www.nxtbook.com/nxtbooks/crain/an3874321237DILDC_supp
https://www.nxtbook.com/nxtbooks/crain/an8784431649FWCWY_supp
https://www.nxtbook.com/nxtbooks/crain/an8392274512LCCSM_supp
https://www.nxtbook.com/nxtbooks/crain/an5623423988AMCTW_supp
https://www.nxtbook.com/nxtbooks/crain/an9384756213BALRS_supp
https://www.nxtbook.com/nxtbooks/crain/an9382218435SPOMB_supp
https://www.nxtbook.com/nxtbooks/crain/ANshowdaily80819
https://www.nxtbook.com/nxtbooks/crain/ANshowdaily80719
https://www.nxtbook.com/nxtbooks/crain/ANshowdaily80619
https://www.nxtbook.com/nxtbooks/crain/an3214543326LCFPC_supp
https://www.nxtbook.com/nxtbooks/crain/an9381127498RISGS_supp
https://www.nxtbook.com/nxtbooks/crain/an8473635224CDSLM_supp
https://www.nxtbook.com/nxtbooks/crain/an8373746387BIMHS_retail
https://www.nxtbook.com/nxtbooks/crain/an7698534210IRHTD_supp
https://www.nxtbook.com/nxtbooks/crain/an8447751218IHAGC_supp
https://www.nxtbook.com/nxtbooks/crain/an8576321197WMPRC_supp
https://www.nxtbook.com/nxtbooks/crain/an6399112438IRHAH_supp
https://www.nxtbook.com/nxtbooks/crain/an8736450912ADGJT_supp
https://www.nxtbook.com/nxtbooks/crain/an8700873122RNARH_supp
https://www.nxtbook.com/nxtbooks/crain/an1093836455HAGTA_supp
https://www.nxtbook.com/nxtbooks/crain/an9808765635GTJTW_supp
https://www.nxtbook.com/nxtbooks/crain/an6525367432FHMLB_supp
https://www.nxtbook.com/nxtbooks/crain/an8597421143MCFPA_supp
https://www.nxtbook.com/nxtbooks/crain/an4298726547VWGGA_supp
https://www.nxtbook.com/nxtbooks/crain/an7799856412ILBOV_supp
https://www.nxtbook.com/nxtbooks/crain/an2056982648AHHIA_supp
https://www.nxtbook.com/nxtbooks/crain/an5678154982IEHDT_supp
https://www.nxtbook.com/nxtbooks/crain/an0211270720DPISS_supp
https://www.nxtbook.com/nxtbooks/crain/an2325269754PSINO_supp
https://www.nxtbook.com/nxtbooks/crain/an5627892889EASBC_supp
https://www.nxtbook.com/nxtbooks/crain/an4778021396LTBFA_supp
https://www.nxtbook.com/nxtbooks/crain/an1549365874TIUIG_supp
https://www.nxtbook.com/nxtbooks/crain/an9685896971RTQAT_supp
https://www.nxtbook.com/nxtbooks/crain/an3126539765SSIKM_supp
https://www.nxtbook.com/nxtbooks/crain/an2348716424IHBFN_v2
https://www.nxtbook.com/nxtbooks/crain/an2713112513DPIAA_GEDsupp
https://www.nxtbook.com/nxtbooks/crain/an2713112513DPIAA_GIEsupp
https://www.nxtbook.com/nxtbooks/crain/an5740978765KIYTC_v2
https://www.nxtbook.com/nxtbooks/crain/an8786483429YWIRB_v2
https://www.nxtbook.com/nxtbooks/crain/an1441850607BCEKP_supp
https://www.nxtbook.com/nxtbooks/crain/an2231982341SHRK_supp
https://www.nxtbook.com/nxtbooks/crain/an9824752309LOLIKP_supp
https://www.nxtbook.com/nxtbooks/crain/an8849332574YIKP_supp
https://www.nxtbook.com/nxtbooks/crain/an3756575112SAIKPv2
https://www.nxtbook.com/nxtbooks/crain/an7389812526DOQKPv2
https://www.nxtbook.com/nxtbooks/crain/an7474633298JQMKPv2
https://www.nxtbook.com/nxtbooks/crain/an8763487432NAOKPv2
https://www.nxtbook.com/nxtbooks/crain/an3748383922LRGKPv2
https://www.nxtbook.com/nxtbooks/crain/an8347508927POTKPv2
https://www.nxtbook.com/nxtbooks/crain/an9610620377FSKKP_supp
https://www.nxtbook.com/nxtbooks/crain/an4981263095CBNKP_supp
https://www.nxtbook.com/nxtbooks/crain/an6723445245SDFLF_supp
https://www.nxtbook.com/nxtbooks/crain/an4862340134FSEJC_supp
https://www.nxtbook.com/nxtbooks/crain/an4596813450LQFCN_supp
https://www.nxtbook.com/nxtbooks/crain/an2348692346SDGCN_supp
https://www.nxtbook.com/nxtbooks/crain/an1634224522ASDLC_supp
https://www.nxtbook.com/nxtbooks/crain/an0267104334RTSJC_supp
https://www.nxtbook.com/nxtbooks/crain/an6029878560PGSCN_supp
https://www.nxtbook.com/nxtbooks/crain/an5214469855HGBKP_supp
https://www.nxtbook.com/nxtbooks/crain/an1062061234GSGBL_supp
https://www.nxtbook.com/nxtbooks/crain/an5038325406GSDCN_supp
https://www.nxtbook.com/nxtbooks/crain/an3992752354ASPLF_supp
https://www.nxtbook.com/nxtbooks/crain/an7986445324GHYCN_supp
https://www.nxtbook.com/nxtbooks/crain/an1455687392FTBTE_v2
https://www.nxtbook.com/nxtbooks/crain/an2289678453HBCLF_v2
https://www.nxtbook.com/nxtbooks/crain/an5633892673TBEKP_v2
https://www.nxtbook.com/nxtbooks/crain/an4663981572FBCJC_v2
https://www.nxtbook.com/nxtbooks/crain/ane_7746982457HCTBV_supp
https://www.nxtbook.com/nxtbooks/crain/an8994656823RVGCN_v2
https://www.nxtbook.com/nxtbooks/crain/an4566329884GVTLF_supp
https://www.nxtbook.com/nxtbooks/crain/an7466398157YCPTS_supp
https://www.nxtbook.com/nxtbooks/crain/an5334987156YBHBL_supplement
https://www.nxtbook.com/nxtbooks/crain/an2822679175GTHTS_bestpractices
https://www.nxtbook.com/nxtbooks/crain/an4893356182CJPCN_v2
https://www.nxtbook.com/nxtbooks/crain/an8388619274RBCCN_v2
https://www.nxtbook.com/nxtbooks/crain/an7833092572SPRBW_v2
https://www.nxtbook.com/nxtbooks/crain/an5533789923FTBLF_v2
https://www.nxtbook.com/nxtbooks/crain/an7884599237HYQJC_v2
https://www.nxtbook.com/nxtbooks/crain/an1335576249HBWKP_v2
https://www.nxtbook.com/nxtbooks/crain/an7855749033KPMLF_v2
https://www.nxtbook.com/nxtbooks/crain/an8946778932RBTTS_v2
https://www.nxtbook.com/nxtbooks/crain/an6735519136YBPMG_v2
https://www.nxtbook.com/nxtbooks/crain/an_20130318Top125
https://www.nxtbook.com/nxtbooks/crain/an3766500224HBPJC_v2
https://www.nxtbook.com/nxtbooks/crain/an_080612_supp
https://www.nxtbookmedia.com