Annual ‘Car Wars’ Data Reveal Industry Challenges Ahead, Recovery in Sight

Bank of America recently unveiled its 30th annual Car Wars report – a proprietary study that quantifies industry product trends, measures competitiveness of original equipment manufacturers’ (OEM) product plans, and provides historical perspective. John Murphy, Bank of America Global Research’s lead U.S. auto equity analyst shared this year’s finding with MICHauto stakeholders, painting a picture of what is in store for the industry as it moves through and beyond the impact of COVID-19.

COVID-19 is driving a decisive downturn across the industry.
Globally, the industry is facing a 20% year-over-year decline in sales and production volume. Despite this globally synchronized decline, a v-shaped recovery – or return to pre-COVID-19 conditions – is expected by the mid-2020s. Companies are now forced to explore more aggressive cost-cutting measures. Murphy acknowledges that because the industry has been experiencing a boom in recent years, some discipline has been lost. These measures, though, will pay off by the mid-2020s, producing strong margins and renewed buy-in.

Product activity among OEMs will vary.
Over the next four years, 50% of vehicles will be launched as internal combustion with the remainder being alternative powertrain variants (electric vehicles, hybrids, etc.). Consumer pull and market dynamics are driving pricing and production of these alternative powertrain vehicles and autonomous technology in the U.S., as opposed to the regulatory influence seen in Asia. Differences in these production rates will stem from allocation towards traditional model launches versus alternative powertrain development.

The technological evolution underway poses both issues and opportunities.
Companies must remain diligent now in optimizing their core businesses. However, it is important to invest in future businesses to fortify their longer-term industry position. Projections show that volume levels will bounce back post-COVID-19 as electric and autonomous vehicle demand increases. These vehicles are being treated as a luxury technology in the U.S., so this surge of demand at higher price points will help support the U.S. market.

Ultimately, the report demonstrates that though the industry will endure a difficult few years, it will emerge stronger with increased production and advanced technology.

Glenn Stevens Jr. Discusses Industry Recovery Outlook During ‘Navigate 2020’ Webinar with The Right Place

A deep dive into new structures driving automotive supplier strategies in the current and post-COVID-19 era was the focus of The Right Place’s “Navigate 2020 Webinar” on Wednesday. MICHauto Executive Director Glenn Stevens Jr. led a conversation with IHS Markit’s Michael Robinet, executive director for automotive advisory services, who provided data and forecasts that described challenges and consolidations for mid-level suppliers globally.

“The rebound from COVID-19 will be slow and paced differently throughout the world,” said Robinet, while also noting China “already has a head start.”

During a Q & A with Stevens, Robinet encouraged west Michigan-based suppliers to “expand their presence or reduce risk.” When Stevens asked about the likelihood of NAFTA’s replacement, USMCA, being enforced starting July 1, Robinet predicted: “There will be a little bit of leeway” given the pandemic.

Discover Auto: How MICHauto is Continuing Student-to-Business Connections Amid Uncertain Times

The COVID-19 pandemic has changed the way we all conduct business, socialize, and learn. These adjustments have been especially evident within the education system. As advocates and supporters of Michigan’s up-and-coming automotive workforce, MICHauto is committing to the continuation of the Discover Auto program, which connects high school students with automotive industry leaders to learn about career opportunities and company culture.

As the school year closes out, the MICHauto team has been planning for Discover Auto programs in the fall. While hopeful to resume in-person tours, the team has opted to move forward in a virtual format to ensure adherence to health and safety guidelines of both schools and host companies. This transition was met with excitement due to the opportunity to expand the reach of the program across the state.

To test this virtual platform and provide a final learning opportunity before students leave for summer break, MICHauto held a virtual Discover Auto session last week with our MICHauto member, Brose. Partner, Project Lead the Way (PLTW), recruited an engineering class from AGBU Alex and Marie Manoogian School in Southfield to participate. Students who were unable to attend were able to watch the recording of the presentation. Presenters from Brose discussed their work, career path, and favorite things about working at Brose. Students participants found the presentation enlightening and learned a lot.

MICHauto excited to continue to engage with students and members via virtual Discover Auto in the fall. If you are interested in becoming a host company, please contact Jenny Orletski-Dehne at jorletski@michauto.org.

Automotive News Publisher Jason Stein Speaks with MICHauto Investors in Town Hall Meeting

MICHauto hosted a virtual town hall meeting with investors featuring guest speaker Jason Stein, publisher of Automotive News. Stein discussed the automotive industry’s economic outlook and global recovery amid the COVID-19 crisis with Detroit Regional Chamber President and CEO Sandy K. Baruah and MICHauto Executive Director Glenn Stevens Jr

OEMs were able to use countries like China hit with COVID-19 earlier as a playbook to prepare for the U.S. to do the same months later, explained Stein. Now that factories are beginning to reopen, Michigan is looking to other parts of the world that already went through this process to guide best practices. 

“Just this week, suppliers and automakers could consult a playbook that was formulated in other regions of the world,” said Stein.  

North America, while more of a patchwork of decision making with state and local governments when it came to their COVID-19 response, companies could implement those actions quickly. Aside from a couple of minor cases, the transition has for the most part been problem-free from a manufacturing standpoint, said Stein. 

While ridesharing and mobility as a service were gaining popularity before the pandemic hit, Stein said he predicts a return to the personal car – as it was 10 or 20 years ago. People are uncomfortable in enclosed spaces, with many reluctant to even step onto a plane. 

Stein noted that vehicle sales in May are already higher than anticipated. This demonstrates pent-up demand due to social distancing. Although, only a quarter of car buyers planning to purchase a vehicle before the pandemic hit are still planning to purchase immediately. Currently 15% have canceled their plans, and the rest are delaying indefinitely.  

If there is not a roaring comeback, the biggest threat is the prolonged effect of COVID-19.” 

Fortune: This Fortune 500 company’s ‘reopening playbook’ is available for free—and has been downloaded 25,000 times

Fortune

May 18, 2020

By: Lee Clifford

Fortune 500 companies have myriad strategies to protect their most sensitive trade secrets. They guard them. They insure them. They enlist experts to encrypt them.

What they don’t do, generally speaking, is give them away.

But these are not ordinary times. Earlier this spring, Lear, a global supplier of auto parts based in Detroit (No. 166 on the Fortune 500), spent thousands of employee hours compiling a comprehensive manual on how to resume operations in the wake of COVID-19. Then the company gave it away for free. Lear’s Safe Work Playbook, available on its website, has now been downloaded more than 25,000 times since it was posted on April 6.

View the full article here. 

Manufacturing Set to Reopen May 11, MICHauto Advised Governor on What Industry Needs

Today’s news from the Capitol marked a big win for MICHauto’s role as the unified voice for the entire automotive industry and supply chain. Gov. Whitmer’s Executive Order allows manufacturing to resume on May 11, and included a ramp-up period MICHauto advocated for earlier this week.

Gov. Whitmer’s press release included a quote from Glenn Stevens, MICHauto’s executive director of MICHauto, and vice president of the Chamber’s Automotive and Mobility Initiatives.

“MICHauto and the Detroit Regional Chamber applaud the Governor for her continued steps to safely re-open our economy. Automotive and manufacturing is not only the backbone of our regional and state economy, it is essential to the functioning of the global supply chain. This is good news for Michigan and the nation.”

Earlier this week, MICHauto sent a letter to the Governor advocating for a minimum five-day period for suppliers to restart prior to OEMs so that they could start shipping parts needed for OEM production to commence efficiently.

“Unlike their OEM counterparts, many firms that comprise the automotive supply chain lack the vast resources to make the necessary production, process, and policy changes required to adapt to the new environment in short order. These firms will need additional time to make their workplaces safe for employees and positioned to ship product allowing OEMs to restart,” Stevens wrote.

Under Executive Order, manufacturing facilities must adopt measures to protect their workers from the spread of COVID-19.

Manufacturing facilities must also train workers on, among other things, how COVID-19 is transmitted from person to person, signs and symptoms of COVID-19, steps workers must take to notify the business or operation of signs and symptoms of COVID-19 or suspected or confirmed diagnosis, and the use of personal protective equipment.

All businesses in the state—including manufacturers—must require masks to be worn when workers cannot consistently maintain six feet of separation from others, and consider face shields for those who cannot consistently maintain three feet of separation from other workers.

MICHauto Helped to Facilitate New Partnership Between City of Detroit and Honda

Glenn Stevens Jr.

While the City of Detroit’s COVID-19 cases continued to rise in early April, a new problem arose – how to safely transport sick Detroiters without transportation from theirs home to the hospitals to receive care? With more and more front line workers testing positive for COVID-19 as well, first responders were not able to keep up with the logistics duties.  A number of volunteers that could transport people stepped up, but without a way to protect the drivers from those who were ill – it would just create a larger problem for Detroit that quickly became a hotbed for the virus.

Mark de La Vergne, the chief of Mobility Innovation for the City of Detroit, put out a call for help.  The question posed to the vast mobility ecosystem in Detroit was, “could we connect the City to a company or solution for this problem?”

On April 15, as I was scanning the latest global automotive industry news, I noticed an article in the Channel News Asia website titled “Honda deploys it’s minivans to transport virus patients.”  In that article I saw a solution for our community here in Detroit. Honda Motor Company in Japan had modified 50 Odyssey minivans with a protective barrier and changes to the HVAC system to protect the driver from the sick citizen in the rear of the vehicle.

I immediately sent this article to de La Vergne at the City and suggested that a colleague in Detroit who works for Honda Communications would be the best and most effective channel to elevate an inquiry from the City of Detroit. It seemed like just the solution we were looking for.

This past weekend, de La Vergne notified me that the City followed up on the potential solution and a partnership was in the process of being forged.  View the full partnership announcement here.

For the past three years MICHauto has helped lead several partnerships to convene organizations and groups around common themes and needs for the automotive and mobility industry to help solve problems through information sharing.  One of those groups is the Detroit Mobility Coalition, a joint effort by the City of Detroit and MICHauto that convened OEMS, suppliers, foundations, economic development groups, startups, and neighborhood associations to focus on transportation and mobility technologies and solutions to improve the lives of Detroiters.

The communication that transpired the last couple of weeks to help bring this Honda solution to Detroit is just one example of how Detroiters innovate through mobility and global automotive technology to solve problems and come together.

Glenn Stevens Jr. is the executive director of MICHauto and the vice president of Automotive and Mobility Initiatives for the Detroit Regional Chamber.


Detroit-area Residents will be Transported to COVID-19 Testing in Modified Honda Odyssey Minivans

DETROITMay 5, 2020 /PRNewswire/ — Honda today delivered 10 Odyssey minivans to the City of Detroit that have been specially outfitted to transport people potentially infected with COVID-19, as well as healthcare workers.  To protect the health of the driver from the potential for droplet infection during transportation, the Honda Odysseys have been retrofitted with a plastic barrier installed behind the front seating area, as well as modifications to the ventilation system to maintain an air pressure differential between the front and rear seating areas.

Honda delivered 10 Odyssey minivans to the City of Detroit to transport local residents and healthcare workers to COVID-19 testing.

These Honda vehicles have been specially outfitted with a plastic barrier installed behind the front seating area and modifications to the ventilation system to help protect the driver from potential infection during transportation.

After seeing news reports about similar specially equipped vehicles modified by Honda in Japan, officials from the state of Michigan and the City of Detroit approached Honda in the U.S. in mid-April about the possibility of acquiring similar vehicles for use in transporting local residents and healthcare workers to COVID-19 testing.  A team of volunteers at Honda’s R&D center in Raymond, Ohio, including senior engineers and fabrication experts, quickly conceived and designed a method to modify the U.S. Odyssey at the Honda R&D Americas vehicle development center in Raymond, Ohio, where it was originally developed.

“As of today, the City of Detroit has tested over 20,000 residents and employees for COVID-19.  Transportation is a critical component of ensuring every Detroiter has access to a test.  We are very appreciative of Honda for choosing Detroit to deploy these newly modified vehicles,” said Mayor Mike DugganCity of Detroit.

The team of Honda engineers and experts in Ohio took the project from the initial concept to completion in less than two weeks.  All material fabrication and installation, and adjustments to the software for the Odyssey’s ventilation system, was done entirely in-house.

“We’re very proud of the efforts made by Honda engineers in Ohio to quickly devise a plan and modify a small fleet of Honda Odyssey minivans to support the people of Detroit in the face of this unprecedented global pandemic,” said Rick Schostek, executive vice president of American Honda Motor Co., Inc. “This project is one of many initiatives being undertaken by Honda and our associates to support communities throughout the country during this very difficult time.”

The Odyssey minivan modified in Japan is a smaller vehicle than the eight-seat U.S. version of the Honda Odyssey that was designed, developed and engineered in the U.S. and is made exclusively at a Honda plant in Lincoln, Alabama.

“Several members of our team have family members or friends working in the medical field to battle COVID-19 or know people who have family members battling COVID-19 infection and this became a very personal challenge to help potential victims and their families,” said Mike Wiseman, senior director for Strategic and Materials Research of Honda R&D Americas, LLC, who led the project.  “At Honda, we believe the purpose of technology is to help people and make their lives better and we were humbled to make this commitment to potentially help save lives.”

Odyssey Modification Process:
Honda engineers in Ohio installed a sealed clear polycarbonate (plastic) panel between the front seat compartment and rear two-row seating area by removing the handgrips on the structural roof pillar (B-pillar), behind the first row, replacing it with new brackets to attach the clear panel.  A second attachment bracket was fabricated and attached to the lower front seat belt anchor point for a total of three secure attachments on each side.

In conjunction with the installation of the clear polycarbonate barrier, the Odyssey’s ventilation system software was tuned to maintain a more positive pressure zone within the front compartment to establish a designed air pressure differential between the front and rear seating areas, greatly reducing the potential for droplet infection migration during transportation.

Honda R&D engineers in Ohio designed the software that controls the ventilation system on the current-generation Odyssey. This core knowledge enabled engineers to tune the software to assure the air pressure differential is compliant with guidelines established by the Centers for Disease Control and Prevention (CDC) for negative pressure rooms in medical and research facilities.  Specifically, the software is tuned to run the blower motor powering the fans in the front seating area faster than the fans for the rear seating area. The resulting air pressure differential creates a more negative pressure chamber in the rear seating area, with rear compartment air exhausted out the vents in the rear of the vehicle.

Comments from State of Michigan Officials:
“When we developed our transportation service to the COVID-19 testing sites, we quickly realized that a lack of separation between the driver and passenger would be a limiting factor in our capacity to transport patients. This innovation from the Honda team will be critical to transporting passengers during this time,” said Mark de la Vergne, Chief of Mobility Innovation for the City of Detroit.

“Honda’s speed in addressing this challenge, paired with Detroit’s willingness to find and detail a use case for Honda, made this a model public-private partnership. The state’s goal is to conduct 15,000 tests a day. This kind of ingenuity will help us get there faster,” said Trevor Pawl, Senior Vice President at the Michigan Economic Development Corporation, and head of PlanetM, the state’s mobility initiative.

“As the conveners of the Detroit Mobility Coalition in partnership with the City for the past several years, MICHauto is committed to facilitating connections such as this to benefit our communities. This partnership with Honda in a time of crisis, is an ideal example of the importance of our mobility ecosystem to connect our local and state leadership and the automotive and mobility industry together. MICHauto is pleased to play a role in helping to facilitate this information and technology transfer,” said Glenn Stevens, Executive Director, MICHauto and Vice President, Automotive and Mobility Initiatives, Detroit Regional Chamber.

Honda Response to COVID-19:
Honda has undertaken several initiatives to harness the spirit of the community in responding to the impact of the COVID-19 pandemic:

  • Honda has teamed up with Dynaflo Inc. to produce diaphragm compressors, a key component of portable ventilators that are used in hospitals and by first responders to help those stricken with the COVID-19 virus. The companies aim to produce 10,000 compressors per month once production reaches capacity.
  • Honda associates have been deploying the company’s 3D printers to produce components for face shields at various company operations, with Honda engineers now working on a method to mass-produce the frames for face shields in Honda facilities.
  • Ten Honda facilities in North America donated over 200,000 items of Personal Protective Equipment to support healthcare providers and first responders, including gloves, face shields, N95 protective masks, alcohol wipes, half-mask respirators and other types of protective gear.
  • Honda has pledged $1 million to address food insecurity in the U.S., Canada, and Mexico, providing donations to food banks and meal programs.
  • Honda also has initiated a COVID-19 Special Matching Gift Program that enables associates to make monetary donations to food programs in their local communities, matching up to $1,000 for each individual associate. The matching fund is in addition to Honda’s $1 million pledge.

About Honda in North America
Honda established operations in America in 1959 and today employs more than 40,000 associates in the development, manufacturing, and sales of Honda and Acura automobiles, Honda power equipment, Honda Powersports products, the HondaJet advanced light jet and GE Honda HF120 turbofan engines.

Based on its longstanding commitment to “build products close to the customer,” Honda operates 19 major manufacturing facilities in North America, working with more than 600 suppliers in the region to produce a diverse range of products for customers locally and globally. In 2019, more than 90 percent of the Honda and Acura automobiles sold in the U.S. were produced in North America, using domestic and globally sourced parts.

Honda also operates 14 major research and development centers in the U.S. with the capacity to fully design, develop and engineer many of the products Honda produces in North America.

Honda R&D Americas employs more than 2,000 associates in the U.S. in the research, design, development, and engineering of a variety of products including cars and trucks, ATVs and side-by-side vehicles and power equipment products. About 1,500 engineers and other staff are employed at the R&D center in Raymond, Ohio, located about 40 miles west of Columbus.

SOURCE Honda

 

MICHauto Investors Awarded During 2020 Automotive News Virtual PACE Awards

Automotive News announced the 2020 Pace Award winners this week during a virtual ceremony celebrating Michigan’s automotive OEM and supplier network. The Awards honor superior innovation, technological advancement and business performance among automotive suppliers. Judged by an independent panel of technologists, they are recognized around the world as the industry benchmark for innovation.

MICHauto congratulates all 2020 winners, especially all investors that earned awards this year.

MICHauto investors that were recognized as 2020 winners and their product or process innovations include:

  • American Axle and Manufacturing Inc.: Electric driveline
  • Continental Structural Plastics: CarbonPro pickup box
  • Lear Corp.: Xevo commerce and service platform
  • Stoneridge Electronics: MirrorEye camera monitor system
  • Tenneco Powertrain Division: IROX 2 bearing coating

MICHauto investors recognized as 2020 winners of the Innovation Partnership Award include:

  • General Motors for its partnership with Shape Corp. to develop a curved carbon fiber bumper;
  • Jaguar Land Rover for its partnership with American Axle and Manufacturing to create an electric driveline.

Watch the 2020 awards presentation and view all winners.


Stay informed with our Automotive Resource Center at bit.ly/MICHautoCOVID19