Supplier Insights: Struggles & Opportunities - Autoline This Week 2404

PANEL:
Julie Fream, President & CEO, OESA
Sig Huber, Senior Managing Director , Conway MacKenzie
Mark Barrott, Principal, Plante Moran
John McElroy, Autoline.tv
Automotive suppliers account for 80% of the parts and components that go into cars. They are also a major source of technological innovation. Right now, they face a lot of financial pressures and economic uncertainty. But if just a few things fall into place, the future could look a lot more optimistic.
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[@polarbearigloo]

I love the skirting of saying tesla

[@TimKennedy1]

Technological disruption is code for Tesla's coming to eat our lunch.

[@trackwalkerfilms]

Not even code...truth

[@jhaybiebasco8529]

80%?!? No wonder traditional automakers will find it impossible to profit from EV sales; they have so little control over their supply chain costs.

[@KTPurdy]

To clarify, no one is making money from EV sales. Tesla has never had a profitable year, in fact they lost another billion last year.

[@joewilder]

Good discussion, but I'm surprised Elon Musk's approach to largely cut out the supplier industry wasn't mentioned. Perhaps Tesla would have liked to work with the supplier industry initially, but they didn't want to do the hard work of ramping up new processes to meet the needs Tesla was going to require. The supplier industry could turn out like print media all over again. Kudos to you John for jumping on the internet bandwagon early.

[@moki123g]

The big oem's put pressure on the suppliers to make things difficult for Tesla. So Tesla started doing it themselves. I'd bet those suppliers won't be getting a call from Tesla any time soon.

[@davemartin9912]

"We still see a long runway for the internal combustion engine." BZZZZZT - Thank you for playing...

[@ColinFox]

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” ― Upton Sinclair

[@OneNationUnderGod.]

There's going to be new ICE vehicles still in production for at least 20 more years. By 2030 it's possible that more than 50% are EV but even that's optimistic. GM sold right at 8.4 million vehicles in 2018 and less than 1% were EV/Hybrid. Yeah Tesla is selling quite a few EVs but it's a drop in the bucket to overall vehicle sales. EVs are still a bit to expensive to build for mass production at an affordable price to the consumer. Most people can't afford an EV when its ICE counterpart is several thousand dollars cheaper. Even once EVs are affordable there's still going to be specific vehicles with an ICE power train. Some customers won't want to give up the rumble of a performance engine even if it's slower than an EV. Also it's going to be a while before heavy duty EV pickups can compete with a diesel version. The Cybertruck is close but it still doesn't compete with a diesel like my 2019 GMC Sierra Denali. Payload capacity and towing capacity are very comparable but I can tow for +400 miles on a single tank of fuel and if I want to tow further in the same day I can refuel in a few minutes. There's no way the Cybertruck will have +400 miles of range while towing near maximum capacity and recharging even a couple hundred miles at a time will still take quite a bit longer that a refueling and you'll likely need to recharge 3-4 times a day on long distance towing trips.

[@davemartin9912]

@@OneNationUnderGod. Here's some food for thought: kzbin.info/www/bejne/r2qUZ6CupM6iZqc At any point in time Tony seems way out there, but he has a better track record than the vast majority of the financial analysts out there..

[@gnoxycat]

@@OneNationUnderGod. From your comment I can assume you take these +400 mile trips. Have you noticed how there are less and less gas stations? There are going to be areas in America soon where gas will not be available for 100's of miles of highway but they will have chargers. Who cares if it takes 20min to charge when there is no gas to put in your tank.

[@OneNationUnderGod.]

@@gnoxycat we're at least 50 years from gas stations being that spread out. I have my Grandpa's old 65 Chevy pickup and that thing still runs like a champ so there's no reason to think cars of today won't still be on the road well into the 2070's and further. There's still going to be ICE vehicles in production at least 10 years from now and more than likely 20 years from now (obviously at a much lower production volume but still being produced) so that gets ICE vehicles needing gas stations into the early 2100's. There's 276 million cars on the road as of 2018 and 99% of those are ICE vehicles, by 2030 there will likely be 300 million. Gas stations won't be going anywhere anytime soon.

[@tonymonastiere8510]

Too bad Sandy wasn't there to teach these clueless three. I'll have my Tesla shaken, not stirred!!! LOL!!!

[@stanspb763]

Whistling past the graveyard. They will all be out of business in 5 years along with all the US brands except Tesla. China is growing, Europe and Japan will not have auto industry in 5 years, Korea seems to have some options. They are like the specialist in making adding machines in a world going to pocket calculator circa 1970's when the HP-35 replaced the slide rule in a single year. I was in college at the time and loved my dependable slide-rule, but the HP came out and it cost more than tuition for a year but students were selling their cars to get one. That was a real disruptive tech for engineers and right now we are in the midst of an even bigger change in direction in transportation and these people do not see they are doomed. I know, after building and restoring cars as a hobby for decades, I have zero interest in ever driving an ICE vehicle ever again. Everyone I talk with suddenly feels the same way. That leaves all the US brands out since they are not serious in developing anything that addresses the change in view. Ford came out with a lame mustang with cheap plastic interior thinking it will fool customers into thinking they are serious. They are not or else they would have been building battery factories 10 years ago. GM is toast, killed their modest program years ago in the original BEV. Even these "experts on the panel claimed hybrids are the way for the near future. They are more complicated and less reliable than ICE, have none of the long life or performance of BEV. At least the German brands are finally admitting they are in trouble and have no answer to the value and performance of Tesla. Soon cars owned by users will be rare, the whole concept of personal transportation is changing. Robotaxi will put them all out of business while transforming the quality of life in cities, where 74% of the world population lives.

[@rwdplz1]

Suppliers were all panicking last year because all the 'experts' were saying car sales were going to collapse.

[@tigerdust542]

CAR COMPANIES WANT TO MAKE GOOD MONEY ... TESLA WANTS TO MAKE GOOD CARS

[@TheAefril]

Where you focus your future direction, thap part will expand. That is why Tesla is now known for quality. Legacy Automakers are known for being very top heavy (fat cat directors) and great advertising. Would you rather have a better car, or a car that has been produced by a fat cat director on a multi million dollar salary package, or a car that had been advertised with an award winning Super Bowl Advertising campaign.

[@southhillfarm2795]

excellent discussion.

[@brandoYT]

Training for workers? No, never. fire and hire must be cheaper. Can't find trained workers - why would that be??

[@marvinegreen]

As the content value of vehicles shifts toward software and electric; will OEMs become more vertical by buying those suppliers that produce or have the technology that will maintain margins for OEM shareholders?

[@111chicane]

Blah, blah, blah... Much talking, no value and nothing to learn from it. Those three guests sound exactly like politicians, I especially the lady. She also look like one and gesture like them. Burocracy at its finest...

[@firstbigbarney]

Suppliers that produce engines and transmissions may as well wear their equipment out now before they have only scrap value and either buy into or develop their own new technology so they have something to sell in the future. We need a tax on carbon to be able to get to the future alive so a 10x increase in the federal fuel tax incrementally would encourage progress to alternate fuel vehicles. We have subsidized the oil industry long enough. In world our fuel prices are out of line with other countries.

[@michelzanoncello903]

Please don't put the individual guest in a "frame". Doesn't do anything to the presentation.

[@tigerdust542]

HYBRIDS ARE DEAD

[@brandoYT]

Prius was the missed opportunity. Top performance vehicles could/should have gone hybrid - learning & minimal battery requirements. That was 20 years ago.

[@backwoodsbungalow9674]

These old fossils need to retire immediately. They are part of the past. Tesla has completely changed the automotive industry and energy storage market. We need to hear from the grandchildren of these obsolete presenters. 😞

[@CharliewatII]

I wonder how many cars these guests have built, repaired or designed between them. I’d guess they all have finance or some business degree. To me way to much stock is placed on what the bagman (Wall Street) thinks & not the engineers.

[@brandoYT]

Management (especially CEO & Board & first tier) getting paid too much. right? Federal government regulations - do nothing, uncertainty, MAGA. sad. Just sit tight. Inaction is king, right? Tesla shows, make a great product people will buy. Make a marginal product, advertise to sell and pray (ignore battery supplies)

[@Cre8Lounge]

To hell with all this autonomous crap. Shit is gonna be hacked