Future for car manufacturers and their supplier base to be examined at CMTS
Toronto, ON -- The current downturn in the automotive sector may be unprecedented, but according to Linda Hase...
Toronto, ON — The current downturn in the automotive sector may be unprecedented, but according to Linda Hasenfratz, CEO of Guelph, ON-based Linamar Corp., a global manufacturer and supplier of automotive and industrial solutions, the opportunities ahead are equally exceptional.
“We’re starting from an incredibly negative point, but there’s going to be a huge opportunity on the other side for those companies who survive it,” says Hasenfratz, a professional who has grown up in the automotive industry. Hasenfratz will be delivering the opening keynote address on Oct. 19 (9:00-10:00 a.m.) at the upcoming Canadian Manufacturing Technology Show 2009 (CMTS), hosted by the Society of Manufacturing Engineers (SME) at the Direct Energy Centre in Toronto, October 19-22, 2009.
CMTS 2009 will exhibit the latest machine tools, automation technologies, metal forming, measurement technologies, tooling solutions, production methods and management strategies. As well, the show is expected to unveil the latest trends in manufacturing innovations and demonstrate how new technological developments can help Canadian manufacturers reinvent themselves on the heels of a recession.
Through a comprehensive exhibitor showcase, Town Hall meetings, panel presentations and a simultaneous technical conference called Automation Rendez-vous 2009, the event provides an in-depth look at technological innovation and the resources businesses need to improve — or adapt — their manufacturing processes.
“For the first time in a decade, we’re going to be looking at rising production levels with fewer competitors, and that amounts to fantastic opportunity in a market that’s estimated at $240 billion globally,” Hasenfratz says.
Despite the challenges and incredible loss — 35 automotive companies declared bankruptcy this year to date — Hasenfratz sees a new landscape ahead, one that will bode well for automotive suppliers in particular. Manufacturers are turning to outsourcing as a way to reduce capital burden and that means the component and assembly work done in-house today represents a new market for suppliers, she says.
“Car manufacturers are finding themselves cash-strapped and yet in a position where they have to invest for the future simply to meet looming vehicle emission reduction requirements,” she notes. “They’re forced to outsource and that means we’re going to start seeing bigger chunks of this billion-dollar market get out to the supply base, which is nothing short of completely exciting.”
That said, however, suppliers still need to rethink strategies moving forward and Hasenfratz will be offering her own survival tips based on her experience in helping to grow Linamar from $800 million in sales to more than $2.3 billion over the past seven years. Priority one, she says, is finding innovative ways to grow sales and increase the content per vehicle that a company supplies — a measure of market share in existing markets — or by tapping into new markets.
Priority two is cost reduction, with the aim of getting current production run rates back to break-even level. But perhaps the most important lesson, she says, is to take action now rather than waiting for the market to rebound.
“You can’t wait for those good old days to return because they might never come back,” says Hasenfratz. “It’s time to figure out what you can do with what you have and to grow your product offering now, whether that means diversification or something new that you haven’t done before.”
Linamar, for example, has been successful in leveraging its own precision machining expertise to branch out into other markets for machined components, such as the energy field. It has also included green technology as a key element to its strategy, targeting markets such as wind generation, solar energy and cordless electric lawnmowers. Better fuel efficiency and reduced emissions are also key priorities for product development in core powertrain products.
“We believe green technology products are all we’re going to have in the future so the idea is to figure out a way to focus a meaningful part of our business there today to position us for growth in the long-term,” she says.
Hasenfratz will also underscore the key message from CMTS 2009 organizers, sharing their belief that manufacturing is vital to restoring a stagnant economy. She characterizes the current economic situation as a bridge economy where 60% of the content is there simply to hold itself up.
“You can’t have an economy that’s just based on service,” she says. “You need real manufacturing jobs, making interesting, innovative products and that people want to buy. Every manufacturing job creates five or six other jobs to support it. Service jobs simply don’t have that multiplying factor.”
“We can’t cut our way out of this current situation, we have to grow our way out,” she emphasizes.
For more information about the Canadian Manufacturing Technology Show or to register for the event, please visit www.cmts.ca.