NEWS
Original Equipment Suppliers Association
2016 Third Quarter │ Edition 1
CRAIN'S 100 Most Influential Women in Michigan - Automotive Sector Front row, from left, Jeneanne Hanley, Global vice president of trim and craftsmanship Lear Corp.; Marcy Klevorn, Vice president and CIO Ford Motor Co.; Mary Petrovich, Executive chairman AxleTech International; Lisa Lunsford, CEO, co-founder and majority owner Global Strategic Supply Solutions (GS3). Back row, from left, Colleen Haley, Senior executive vice president of global Ford business unit Yazaki North America Inc.; Julie Fream, President and CEO Original Equipment Suppliers Association; Birgit Behrendt, Vice president, global programs and purchasing operations Ford Motor Co.; Christine (Chris) Barman, Head of electrical and electronics engineering FCA North America Photo by Aaron Eckels
IN THIS ISSUE... 3 5 6
The Suppliers' Voice OESA Events OESA Supplier Barometer
7 8 9
OESA 2nd Quarter Podcast Legal Corner The Value of OESA Membership
10 11
OESA Town Halls Calendar of Events
Congratulations to the 100 Women...
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Photos by: Aaron Eckels
Voice
The Suppliers’
The Industry at a Crossroads
The automotive industry has played a critical role in much of the world’s economy for more than a century. Yet some of the most significant shifts in vehicle design and production are happening right now. Automobiles are becoming the ultimate “mobile” device. As the automotive industry strives to make vehicles smarter, safer and more efficient, supplier innovation has taken center stage. Opportunities abound for both established and new entrants in the supplier industry around the globe. Automotive innovation is also driving fierce competition, hefty investments and increased government pressure. With the added uncertainty of this year’s political climate, the industry is at the intersection of great opportunity and even higher risk. It is at this juncture that OESA launches the OESA 2016 Annual Conference – The Industry at a Crossroads. I hope you will join us at the 18th Annual OESA Conference on November 2, 2016, at COBO Center as we explore the industry’s future at the crossroads. The conference will feature industry thought leaders that will share key trends and actionable insight from the OEM, supplier executive and industry analyst perspective. Confirmed presenters include:
Julie A. Fream
President and CEO
I recently had the honor of being recognized as one of the Crain’s “100 Most Influential Women in Michigan.” It is humbling to be a part of a dynamic group of women that are making significant strides in moving Michigan and the world forward. My goal is to make an impact in the automotive supplier community by championing supplier interests throughout the supply chain. For a complete list of CRAIN'S 100 Most Influential Women in Michigan, click here http://www. crainsdetroit.com/awards/ mostinfluentialwomen/2016.
• Craig Giffi, Vice Chairman and U.S. Automotive Leader, Deloitte LLP • Rich Karlgaard, Publisher of Forbes, and Author, “Team Genius: The New Science of High-Performing Organizations” • John McElroy, Host, Autoline Daily • Xavier Mosquet, Senior Partner & Managing Director, Boston Consulting Group, Inc. • Emily Kolinski Morris, Chief Economist, Ford Motor Company • Michael Robinet, Managing Director, IHS Automotive • Dr. Mark Rosekind, Administrator, National Highway Traffic and Safety Administration • Gary Silberg, Partner, The Americas Head of Automotive, KPMG • Ann Wilson, Senior Vice President, Government Affairs, MEMA For more information about the annual conference, please visit http://www.oesa.org/ Annual-Conference/2016-OESA-Annual-Conference. For more information about the industry, I invite you to contact our new Senior Economist Charlie Chesbrough at 248.430.5954. As always, please also feel free to contact me with comments and questions at 248.430.5963 or jfream@oesa.org.
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Register Now for the 2016 OESA Annual Conference
The Industry at a Crossroads November 2, 2016 │COBO Center │Detroit, Michigan To register, visit oesa.org
Event partnerships are now available and provide a unique opportunity to connect with hundreds of industry executives. For more partnership information, contact Brenna McCann at 248.430.5970 or bmccann@oesa.org.
OESA EVENTS
2016 MARKETING SUMMIT │ JULY 13 Supplier executives are invited to attend the OESA Marketing Summit, “Communicating Globally, Socially and Legally.” The event will be held on July 13, 2016, at the MSU Management Education Center, Troy, MI, and is designed to provide valuable insight on the latest trends in B2B marketing, including global branding, social media opportunities and managing legal risk from a marketing perspective Steven G. Pitsillos, principal, roundtable6, will address the increasing challenge of marketing a global brand in today’s rapidly evolving automotive industry. Pitsillos, a 27-year veteran of the automotive industry with experience working with OEMs, dealers and suppliers, will provide a proprietary blueprint for how to develop a marketing strategy that delivers international success. roundtable6 is a strategic communication company that specializes in helping B2B companies grow their business through more impactful branding and more effective & efficient marketing. Rob Powers, senior enterprise account executive – Elevate, LinkedIn, will share how innovative companies are leveraging Employee Advocacy (Engagement) for impact across the enterprise by truly transforming their greatest asset (their employees) into brand ambassadors, social sellers, talent magnets and beacons of insight to their networks through thoughtful content sharing across social media. Consumers and competitors are paying closer attention to advertising claims than ever before. Janet L. Ramsey, partner, Warner Norcross & Judd, will discuss the risks and pitfalls of advertising claims both in traditional and new media, including social media. Then discuss methods to manage those risks on the front-end, with real examples from original equipment suppliers. OESA members and guests may register in the events section at http://www.oesa.org. For registration assistance and program information, please contact OESA at 248.952.6401.
► SUPPORTING PARTNER
For more information and to register, visit oesa.org, contact OESA at 248.952.6401 or email inquiries to info@oesa.org. OESA News - 2016 Third Quarter
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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: www.oesa.org/Knowledge-Center/Automotive-Supplier-Barometer
Kathy Reiss Director, Research and Industry Analysis 248.430.5960 kreiss@oesa.org
PODCAST
OESA 2Q INDUSTRY OUTLOOK PODCAST NOW AVAILABLE
OESA has changed the format of the quarterly "OESA Digest Webinar." The webinar is now the "OESA Industry Outlook Podcast." This complimentary, OESA members-only podcast features: • Global Light Vehicle Industry Outlook Jeff Schuster, Senior Vice President, LMC Automotive • April OESA Automotive Supplier Barometer Results Kathy Reiss, Director, Research and Industry Analysis, OESA • Motor & Equipment Manufacturers Association, Washington, D.C. Update Thomas J. Lehner, Vice President, Public Policy, MEMA
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
• Technology Update Brian Daugherty, Chief Technology Officer, MEMA
Officer Steve Handschuh* President and CEO Motor & Equipment Manufacturers Association *Executive Committee
• OESA Young Leadership Council #5 Ginger Juncker, Executive Director, Programs and Member Services, OESA
Directors
• OESA Organization and New Staff Update Julie A. Fream, President and CEO, OESA
• Upcoming Events David Johnson, Director, Events and Member Programs, OESA This pre-recorded podcast is downloadable by OESA members at any time and is updated each quarter. It focuses on industry trends, events and the latest industry forecasts. OESA members can CLICK HERE (http://www.oesa.org/Doc-Vault/Knowledge-Center/ Reg-and-Affil-Member-Only-Content/OESA-Podcast.pdf) to access the podcasts. For more information, contact Kathy Reiss at 248.430.5960 or kreiss@oesa.org.
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
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
In addition to the requirements under the Principles of Federal Prosecution of Business Organizations, the following items are required to receive full mitigation credit:
• 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
• 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
• 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 Third 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 NewsThird - 2016 Quarter Vol. 3
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OESA EVENTS OESA Board of Directors (Continued from page 7)
Directors Jacqui Dedo Co-Founder Aware Mobility llc. Paul Doyle CEO Coastal Automotive John Dunn President and CEO The Americas Plastic Omnium Auto Inergy Douglas J. Grimm President & COO MPG Inc. Michael Haughey President North American Stamping Group Ramzi Hermiz President and CEO Shiloh Industries, Inc. Don Manvel Chairman and CEO AVL Americas 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.
OESA MEMBERS-ONLY TOYOTA TOWN HALL │ JULY 20 OESA invites members to a Toyota town hall meeting with Robert Young, group vice president, purchasing, supplier engineering development and cost planning, Toyota Motor Engineering & Manufacturing North America, Inc. (TEMA), on July 20, 2016, at The Inn at St. John’s, Plymouth, Mich. Young is responsible for overseeing all vehicle parts and materials procurement, supplier preparation and cost planning for TEMA. Toyota executives joining Young for the Q&A session following his presentation include:
• • • • • •
Jim Holloway, General Manager, Supplier Relations Ryan Grimm, General Manager, Project Management Brian Jordan, General Manager, SED Deb Schroeder, General Manager, Interior and Exterior Jamie Todd, General Manager, Powertrain and Chassis Additional executives TBA
Toyota is in the process of establishing a new headquarters in North Dallas (Plano), Texas, for its North American operations to better serve customers and position Toyota for sustainable, long-term growth. The initiative also includes the expansion of the Toyota Technical Center (TTC) in Ann Arbor, Mich., to accommodate the relocation of direct procurement and supplier engineering development from Erlanger, Ky. For suppliers, this move is meant to foster greater customer-supplier collaboration and accommodate future growth in product development. Members can register and network with Toyota executives from 12 p.m. – 1 p.m. over a light lunch. The town hall meeting will run from 1 – 2:45 p.m. Individual networking opportunities will also be available following the meeting.
VOLKSWAGEN GROUP OF AMERICA TOWN HALL MEETING │ AUG. 25 OESA members and Volkswagen suppliers are invited to participate in the eighth annual Volkswagen Group of America Town Hall on Aug. 25, 2016, at the Suburban Collection Showplace, Novi, Mich. VW’s executive vice president of purchasing, Mahesh Kodumudi, will discuss Volkswagen’s sourcing strategy and regional footprint, and Michael Lovati, general manager, commodities, Volkswagen Group of America, will present Volkswagen’s plan for localizing content, cost optimization and what that means for suppliers’ long-term opportunity. Following the formal presentations, Marty Ross, manager, central functions, Volkswagen Group of America, will join Mr. Kodumudi and Mr. Lovati for a question and answer session. Volkswagen executives will be available for networking from 1 – 2 p.m. and following the formal meeting.
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OESA EVENTS
CALENDAR OF EVENTS UPCOMING OESA EVENTS AND ACTIVITIES July
13 Aug.
26
Nov.
2
REGISTER NOW! Marketing Summit MSU Management Education Center Troy, MI SAVE THE DATE OESA Member Appreciation M1 Concourse, Pontiac, MI REGISTER NOW! OESA Annual Conference COBO Conference Center Detroit, MI
OESA OEM TOWN HALLS July
REGISTER BEFORE JULY 15TH Toyota Town Hall Meeting The Inn at St. John’s, Plymouth, MI
Aug.
SAVE THE DATE Volkswagen Town Hall Meeting Suburban Showplace, Novi, MI
Oct.
SAVE THE DATE FCA Town Hall Meeting COBO Center, Detroit, MI
Oct.
SAVE THE DATE Honda Town Hall Meeting Burton Manor, Livonia, MI
Dec.
SAVE THE DATE Ford Town Hall Meeting Ford Headquarters, Dearborn, MI
20 25 4
13 2
UPCOMING COUNCIL MEETINGS* July
OESA Legal Issues Council Meeting OESA Conference Center Southfield, MI
Aug.
Chief Purchasing Officers Council Meeting OESA Conference Center Southfield, MI
July
OESA 2016 – Getting the Most Out of Your Membership OESA Conference Center Southfield, MI
Aug.
Young Leadership Council 3 Meeting OESA Conference Center Southfield, MI
July
OESA Human Resources Council Meeting OESA Conference Center Southfield, MI
Aug.
12 14 21
11
18 24
Communications Executives Council Meeting OESA Conference Center Southfield, MI
*Open to council members & invited guests only.
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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Original Equipment Suppliers Association Check out our online publication at www.oesa.org/news
25925 Telegraph Rd., Ste. 350 │Southfield, MI 48033-2553 248.952.6401 │oesa.org │info@oesa.org Connect with us on
OESA News is provided by the OESA Communications Team April Buford Director, Communications
Jeff Laskowski Manager, Communications
Alia Bazzi Website and Graphic Designer
248.430.5964 abuford@oesa.org
248.430.5950 jlaskowski@oesa.org
248.430.5958 abazzi@oesa.org