NEWS
Original Equipment Suppliers Association
2016 Second Quarter │Edition 2
Photo by: Mark Finkenstaedt
IN THIS ISSUE... 3 5 6
The Suppliers' Voice OESA Events Supplier Barometer
7 8 9
YLC5 Nominations Legal Corner Inside OESA
10 11
This edition is sponsored by
OESA New Team Members Calendar of Events
ZF
Bendix
Continental
Valeo
The Hon. Victor Mendez
The Hon. Senator Gary Peters
Magna
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Delphi
Steve Handschuh
Bosch Photos by: Mark Finkenstaedt
Voice
The Suppliers’
Julie A. Fream
President and CEO
OESA Members Display The Future of Mobility at the MEMA Summit in Washington, D.C.
Congratulations to the many suppliers that displayed their latest technology during the May 17-18 MEMA Summit Ride & Drive in Washington, D.C. MEMA conducted this event for the benefit of federal policymakers and the national press. OESA supplier members, including Bendix, Bosch, Continental, Delphi, Magna, Valeo, and ZF, demonstrated advanced safety and crash avoidance technologies, such as autonomous braking and steering; driver and parking assistance; and vehicle-tovehicle communication — much of it driven by software and imaging from vehicle cameras and radar. The event was well attended and included many executives from the Department of Transportation (DOT), National Highway Traffic Safety Administration (NHTSA), and National Traffic Safety Board (NTSB). The Honorable Victor Mendez, U.S. Deputy Secretary of Transportation, experienced the technology first hand. During his review of the demonstrations, he stated that vehicle safety is the “DOT’s highest priority - it always has been and always will be.” Michigan Senator Gary Peters was also in attendance. MEMA President Steve Handschuh said the advanced driver-assistance systems on display during the summit are “the future of mobility,” adding that many of them offer improvements for both safety and fuel efficiency. Thanks to all of our members for allowing OESA to help champion your business interests in venues like this and throughout the year. As always, please feel free to contact me with comments and questions at 248.430.5963 or jfream@oesa.org.
Julie
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OESA EVENTS
OESA 2016 ALIXPARTNERS GLOBAL AUTOMOTIVE OUTLOOK EXECUTIVE BREAKFAST BRIEFING │ JUNE 23 OESA invites supplier members to attend the 2016 AlixPartners Global Automotive Outlook® Executive Breakfast Briefing with John Hoffecker, global vice chairman-operations, and Mark Wakefield, Americas leader-automotive, AlixPartners LLP. The event will be held on June 23, 2016, at The Townsend Hotel, Birmingham, Mich. Based on AlixPartners’ in-depth analysis of the financials and operations of more than 150 global suppliers and 50 automakers, this executive breakfast briefing will provide the analysis of key trends likely to structurally impact the industry over the next ten years. The 2016 report is the 21st edition of the AlixPartners study and includes a deep-dive analysis on North America, Europe, Japan/Korea and China. Hoffecker and Wakefield will also discuss structural changes affecting the supply base and operational actions the best suppliers take to improve their competitive position. This supplier-centric event also focuses on strategies for targeting investments in the most attractive opportunities and developing strong competitive positions in those markets. Hoffecker and Wakefield will address: • Supplier financial benchmarks and asset-utilization strategies • Quality and warranty commercial trends, and impending supplier implications • Global market demand, and OEM platform and manufacturing-footprint strategies • Supplier impacts from recent product demand shifts, raw-materials price deflation and progress in electronics for driver assistance and connectivity This meeting is intended for supplier CEOs, presidents, CFOs and strategic planners. Also, the review of OEM financials and strategies will benefit sales and marketing executives looking to gain insights into their customers’ commercial needs and how to mitigate risk. Hoffecker and Wakefield will also participate in a question session targeting issues that are top of participants’ minds. Only members attending the meeting in person will receive the AlixPartners’ benchmark data and analysis. OESA supplier members can register in the events section of http://www.oesa.org. For registration and program information, contact OESA at 248.952.6401 or info@oesa.org.
► SUPPORTING PARTNER
For more information and to register, visit oesa.org, contact OESA at 248-952-6401 or email inquiries to info@oesa.org.
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SUPPLIER BAROMETER
IMPROVED SUPPLIER OUTLOOK FUELED BY NEW OPPORTUNITIES AND GLOBAL MARKETS
The April 2016 OESA Automotive Supplier Barometer theme was centered around globalization and supply chain issues. The Supplier Sentiment Index (SSI) remains in positive territory with an index result of 55, up two points from January. Business opportunities, improving global markets and strong automotive sales fuel the improved outlook. However, suppliers are seeing a leveling off in production volumes. As was the case in 2015, absolute growth continues in all global regions with the exception of South America. However, the rate of growth across all regions is slowing with the exception of Mexico, where a slight increase is shown. South America continues to contract this year at a higher rate than 2015. Overall, macro-economics and labor/talent availability are the predominant hurdles that suppliers face in meeting their 2020 growth targets. The majority (75 percent) of products produced in North America still come from the United States. Mexico and Canada average 20 percent and five percent of manufacturing respectively. When considering export/import
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balance of U.S. produced parts, the median value of exported parts to other regions is 15 percent, with an upper quartile of 25 percent and a lower quartile of five percent. The primary receiving region of the exported product is Mexico, followed by Canada and Japan/Korea. Localization was the primary factor in export decisions. An estimated 20 percent of material costs for U.S. production is purchased outside of the United States; primarily coming from Japan/Korea and China. Increasing buys from Mexico were indicated and localization was a common theme in responses. Supply chain constraints continue to be watched. The percent of respondents reporting that they do not have supply chain constraints improved from 41 percent in 2015 to 56 percent this year. For suppliers still seeing possible supply constraints, they are concentrated in the critical areas of powertrain and electrical. Chassis systems and component concerns improved. As suppliers look at increasing sub-tier capacity or capabilities, the focus tends to be on identifying and growing global suppliers, tooling and die companies and suppliers in Mexico.
About the OESA Automotive Supplier Barometer: The OESA Automotive Supplier Barometer takes the pulse of OESA regular members and provides a snapshot of the business environment, commercial issues and supplier strategies. For more on the OESA Automotive Supplier Barometer: https://www.oesa.org/resource/oesa-automotive-supplier-barometer-studies
Kathy Reiss Director, Research and Industry Analysis 248.430.5960 kreiss@oesa.org
COUNCILS
YOUNG LEADERSHIP COUNCIL (YLC5) Attracting and retaining key talent remains a top strategic challenge at most OESA member companies. OESA created the Young Leadership Council (YLC) to assist member companies in retaining key employees and provide a forum to develop those employees. OESA is pleased to announce the formation of the fifth Young Leadership Council (YLC5) for 2016-2018. This council is open to OESA supplierand affiliate member companies and provides a forum to develop and retain key personnel on a management track or otherwise considered to be a high potential employee. YLC5 nominees should be management staff from an OESA member company, on an “executive track,” and generally 38 years of age or under. Nominees may come from any functional area including finance, sales, marketing, manufacturing, human resources, purchasing, logistics, communications or engineering. Through presentations from thought leaders in such areas as negotiation, customer service and leadership, and through opportunities to share best practices and experiences, YLC members can expect to leave the two-year program well-rounded, prepared for increased responsibility, and equipped for the next step in their career with the member company. OESA invites executives to nominate candidates for the Young Leadership Council. Nominees and nominators may complete the nomination form together. Additional information, such as resume, CV or award recognition or achievements, are welcome and can be submitted with the nomination form. Nominees will be evaluated on their range and depth of experience, level of responsibility and how they would contribute diverse and informed opinions to council discussions. Applicants will be notified of their acceptance to the council on a rolling basis. The dues for this two-year program are $3,000 per individual council member and are invoiced to the council member upon acceptance. The first meeting of the YLC5 will take place on October 20, 2016. Early nominations are encouraged. Member organizations are also able to sponsor YLC5. For more information on the OESA Young Leadership Council, contact:
Ginger Juncker Executive Director, Councils and Member Programs 248.430.5953 gjuncker@oesa.org
Keiyania Mann Manager, Council Planning and Communications 248.430.5952 kmann@oesa.org
OESA Board of Directors Chairman of the Board Samir Salman* CEO NAFTA Region Continental Automotive Systems, Inc. Immediate Past Chairman Daniel E. Sceli* President and CEO Peterson American Corporation Vice Chairman Mike Mansuetti* President Robert Bosch LLC Vice Chairman Michael E. Martini* President, Consumer OE Bridgestone Americas Officer Julie A. Fream* President and CEO Officer Steve Handschuh* President and CEO Motor & Equipment Manufacturers Association *Executive Committee
Directors Oscar Albin Executive President INA, National Association of Automotive Parts Manufacturers in Mexico Paul Barnett President Principal Manufacturing James Bradbury President Grand Rapids Controls Company LLC Laurent Bresson President and Global CEO Nexteer Françoise Colpron CEO North America Valeo David C. Dauch Chairman and Chief Executive Officer American Axle & Manufacturing (Continued on page 10)
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LEGAL CORNER
DOJ’S NEW FCPA GUIDANCE
AND PILOT PROGRAM RAISE THE STAKES FOR AUTO SUPPLIERS The automotive industry has been the subject of Foreign Corrupt Practices Act (“FCPA”) enforcement actions and now the stakes are even higher. On April 5, 2016, DOJ issued its “FCPA Enforcement Plan and Guidance” identifying three steps to enhance its enforcement strategy: (I) intensifying investigative and prosecutorial efforts by adding ten prosecutors to its FCPA unit; (II) strengthening and enhancing coordination with foreign law enforcement; and (III) implementation of a one year FCPA enforcement Pilot Program. Under the Pilot Program companies can receive mitigation credit if they meet three factors: (1) voluntary disclosure; (2) full cooperation; and (3) remediation. Disgorgement of all profits from the FCPA violation is also required. Companies may obtain up to a 50 percent reduction off the bottom end of fine range and not avoid appointment of a monitor if the company has implemented an effective compliance program. Furthermore, DOJ will consider a declination of prosecution. Companies that do not self-report, but meet all the other criteria may obtain up to a 25 percent reduction off the fine range. To satisfy these three factors, automotive suppliers must meet the following requirements:
1. VOLUNTARY SELF-DISCLOSURE Voluntary disclosure must be a truly voluntary disclosure and not one that is required. The disclosure must occur: • Prior to an imminent threat of disclosure or government investigation • Within a reasonably prompt time after becoming aware of the offense • Include all relevant facts, including facts about the individuals involved in any FCPA violation
2. FULL COOPERATION In addition to the requirements under the Principles of Federal Prosecution of Business Organizations, the following items are required to receive full mitigation credit: • Timely disclosure of all facts relevant to the wrongdoing, including all facts related to officers, employees or agents • “Proactive cooperation” • All relevant documents are expected to be preserved collected and disclosed
• Timely updates of company’s internal investigation and de-confliction of an internal investigation with the government investigation • All relevant facts regarding potential criminal conduct by all third-party companies and individuals • Make current officers and employees available for interviews, including, overseas officers and employees and former officers and employees (subject to Fifth Amendment rights) • Disclosure of all relevant facts gathered during a company’s investigation including attribution of facts that does not violate attorney client privilege, rather than a general narrative of facts • Disclosure of overseas documents, unless prevented by foreign law • Facilitate, unless prohibited by law, the third party production of documents and witnesses in foreign jurisdictions • Translations of relevant documents
3. REMEDIATION The following items are required to receive remediation credit. • Implementation of an Effective Compliance and Ethics Program: The criteria will include: ◦ Establishing a “culture of compliance” ◦ Having sufficient compliance resources ◦ Employing qualified and experienced compliance personnel ◦ Independence of the compliance function ◦ Performing an effective risk assessment and tailoring the compliance program to that assessment ◦ Ensuring that compliance personnel compensation is comparble to other employees ◦ Auditing of program to assure effectiveness ◦ Having compliance personnel reporting within the company • Discipline of Culpable Employees: Companies must not only discipline culpable employees, but implement a system that provides for disciplining others with oversight of the responsible individuals • Acceptance of Responsibility: Demonstrate recognition of the seriousness of the misconduct, acceptance of responsibility for it, and implement reforms to identify and reduce the risk of repetition of such misconduct
Ted Planzos is an attorney with Clark Hill, PLC, representing corporate officers and corporations
before regulatory agencies on various white-collar matters including FCPA. If you have any questions, Ted can be reached at 202.572.8666. 8 │ OESA News - 2016 Second Quarter
INSIDE OESA
DISCOVER THE VALUE OF OESA MEMBERSHIP Join more than 430 member organizations that are represented by the leading association in the North American automotive supplier sector. Through advocacy initiatives, industry events, networking forums, global connections and the expertise of leading automotive thought leaders, OESA members stay abreast of the industry and have access to exclusive information to make critical business decisions. INDUSTRY EVENTS: OESA industry events offer supplier-centric insight by authorities in the industry. Topics are member-driven and address today’s supplier interests and concerns. TOWN HALL MEETINGS: OESA’s town hall meetings offer unparalleled access to OEM decision-makers in purchasing, engineering and the supply chain. PEER GROUP COUNCILS: Ranked among the top benefits of OESA membership, OESA councils address issues of common interest for every functional area in a supplier organization.
ADVOCACY: MEMA’s government affairs team represents members of OESA on state and federal issues and works to protect the business interests of the supplier community. MEMBER RESOURCES: OESA offers resources to capture the “pulse” of the supplier industry. Through industry analysis, forecasts, white papers and publications, OESA member resources provide members access to exclusive information. INDUSTRY COMMUNICATIONS: OESA keeps the industry informed with a quarterly newsletter, weekly updates and event alerts. To learn more, contact: Steve Horaney Vice President, Membership and Sales 248.430.5969 shoraney@oesa.org
Brenna McCann Senior Manager, Membership and Sales 248.430.5970 bmccann@oesa.org
OESA 2015-16 ANNUAL REPORT OESA has launched the 2015-16 Annual Report and Association Update. This year’s publication outlines OESA’s strategic initiatives for 2016 and beyond, as well as a provides a listing of industry-specific publications, online resources and a roster of OESA members as of April 2016. It features important 2015 association information on OESA’s key accomplishments, cornerstone events, advocacy initiatives with MEMA, and a financial summary. It also includes a listing of OESA’s Board of Directors, staff, and a comprehensive list of OESA’s Peer Group Councils and global activities. For a free copy of the 2015-16 Annual Report and Association Update, contact any member of OESA at 248-952.6401 or view it online at www.oesa.org/Publications/ OESA-Annual-Report
OESA News OESA - 2016 News Second - 2016 Quarter Vol. 2
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INSIDE OESA OESA Board of Directors
OESA WELCOMES
Directors
NEW TEAM MEMBERS
Jacqui Dedo Industry Advisor
OESA is pleased to welcome to new team members.
(Continued from page 7)
Paul Doyle CEO Coastal Automotive
Charles Chesbrough is the new Executive Director, Strategy & Research and Senior Economist.
John Dunn President and CEO The Americas Plastic Omnium Auto Inergy
Charles joins OESA with more than 25 years of experience in utilizing data for quantitative analysis to uncover key metrics across many industries. His background will serve the industry and OESA members well by providing important information and unique analysis of the supplier community.
Douglas J. Grimm President & COO MPG Inc. Michael Haughey President North American Stamping Group Ramzi Hermiz President and CEO Shiloh Industries, Inc. Kazumasa Kimura President and COO DENSO International America Don Manvel Chairman and CEO AVL Americas
Prior to joining OESA, he was the Senior Principal Economist and Director of Industry Analysis at IHS Automotive, where he was responsible for developing and integrating statistical models and economic scenarios into global automotive forecasts. Before IHS, he was a senior consultant in Ford Motor Company's marketing strategy group. Charles was also a senior manager at two technology start-up companies, and a market research project manager. He began his career as a floor trader at the Chicago Board of Trade. Charles holds a bachelor’s degree in economics from Michigan State University, and a master’s degree in economics from the University of Illinois at Chicago. He later returned to Michigan State University and completed many courses in the Economics PhD program. Charles Chesbrough can be reached at 248.430.5954 and cchesbrough@oesa.org.
Lon Offenbacher President and CEO Inteva Products Michael Robinet Managing Director IHS Automotive Wes Smith President and CEO E & E Manufacturing Co., Inc. Armando Tamez CEO Nemak Jim Teets President and CEO ADAC Automotive Nigel Thompson President and CEO Yazaki North America, Inc. James Verrier President and CEO BorgWarner Inc.
David Johnson is the new Director of Events and Member Programs. In this role, Johnson is responsible for executing major OESA events, implementing events standards and managing the annual events calendar. David brings an extensive association background to OESA. Since 1999, he has worked at the Michigan Association of CPAs – a non-profit association that serves more than 18,000 Michigan CPAs, business professionals and students. Most recently, he was director, membership & academics. Prior to that, he held various management and core team roles in academics, business systems, career development, conferences and events, information systems and membership. In 2014, David was recognized as an “Outstanding Accounting Academic Outreach Professional” by the American Institute of CPAs for his efforts to improve academic outreach to accounting students and educators. David holds a Bachelor of Arts in English and History from Oakland University in Auburn Hills, Mich. He is currently pursuing Certification in Organizational Management from the U.S. Chamber of Commerce Institute of Organizational Management. David Johnson can be reached at 248.430.5968 and djohnson@oesa.org. “We are very excited to welcome Charles and David to our team,” said OESA President and CEO, Julie A. Fream. “Their background and expertise are great assests to OESA.”
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OESA EVENTS
CALENDAR OF EVENTS UPCOMING OESA EVENTS AND ACTIVITIES June
23 July
13 Nov.
2
AlixPartners Global Automotive Outlook Executive Briefing The Townsend Hotel Birmingham, Mich. SAVE THE DATE Marketing Summit MSU Management Education Center Troy, Mich. SAVE THE DATE OESA Annual Conference COBO Conference Center Detroit, Mich.
OESA OEM TOWN HALLS SAVE THE DATE July
Toyota Town Hall Meeting The Inn at St. John’s, Plymouth, Mich.
Aug.
Volkswagen Town Hall Meeting Suburban Showplace, Novi, Mich.
Oct.
FCA Town Hall Meeting COBO Center, Detroit, Mich.
Dec.
Honda Town Hall Meeting Burton Manor, Livonia, Mich.
Dec.
Ford Town Hall Meeting Ford Headquarters, Dearborn, Mich.
20 25 13 2 2
UPCOMING COUNCIL MEETINGS* June
8
June
9
June
16
Small & Medium Enterprise Presidents Council Meeting* OESA Conference Center Southfield, Mich.
Sales Executives Council Meeting* Sheraton Detroit Novi Hotel Novi, Mich.
June
23
June
30
Chief Financial Officers Council Meeting* The Townsend Hotel Birmingham, Mich.
Warranty Management Council Meeting* OESA Conference Center Southfield, Mich.
Product and Technology Development Council* OESA Conference Center Southfield, Mich.
*Open to council members & invited guests only.
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Original Equipment Suppliers Association Check out our online publication at www.oesa.org/news
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OESA News is provided by the OESA Communications Team April Buford Director, Communications
Jeff Laskowski Manager, Communications
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248.430.5964 abuford@oesa.org
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248.430.5958 abazzi@oesa.org