Detroit Automakers are Back on Track , But what about TC’s automotive-supply manufacturers?
REGION – It was only about a month ago that Detroit's Big Three automakers proudly posted robust sales figures for July and expressed optimism that the trend might continue.
U.S. consumers bought nearly 1.1 million cars and trucks that month – with Chrysler, Ford and GM accounting for 48 percent of all new vehicles. Officials for the Big Three noted that the higher sales were "a good sign for all of us."
Automakers predict the year will end with almost 13 million units sold, up from 11.6 million last year. But those who provide parts to the auto industry were a little less effusive, voicing only cautious optimism about the future.
"We are surviving," says Tom Crandall, president of Great Lakes Trim. "We are up in sales compared to where we were a few years ago."
Based in Williamsburg, Great Lakes Trim supplies components for a number of automotive lines, including Jeep, Buick, Cadillac, Hummer, Hyundai, Ford, Nissan and Corvettes.
In order to survive the state's struggling economy, officials at Great Lakes Trim had to make some tough choices. They tightened their belt and that helped the company stay afloat.
"We cut way back," recalls Crandall. "We actually shut our plant down for two weeks in 2009. We really watched our expenses. We laid off everybody, including salary (workers). We have never done that before."
But the future looks a little bit brighter now.
"According to our releases from customers, numbers look good for the rest of the year," says Crandall. "Some of the new jobs that we have quoted will need new equipment and more employees, so hopefully we will be awarded these new jobs."
Auto suppliers from across the state assessed the economy during the annual Center for Automotive Research (CAR) session at the Grand Traverse Resort last month. Suppliers and purchasing executives predicted an increase in U.S. parts sourcing because:
– The weak U.S. dollar gives U.S.-made parts a currency cost advantage.
– Protection from supply disruptions, ranging from labor disputes at shipping docks to natural disasters, such as the Japanese earthquake.
– Automakers are now talking up the use of more U.S. suppliers.
– Suppliers have lowered their labor costs in recent years.
"We are clearly taking steps to make more of the vehicles in the U.S. that we sell here," Rebecca Vest, purchasing VP for Renault-Nissan told reporters.
Chrysler vice president for purchasing Dan Knott said his company has done away with a long-held industry practice in which officials were under orders to obtain a set percentage of supplies from low-cost nations, including China.
He added that Chrysler is sourcing more business with U.S. suppliers because the company is growing its domestic volume and planning to boost exports, especially of its Jeep line. Knott predicted that Chrysler's merger with Fiat will benefit suppliers, but declined to elaborate.
Stromberg Carlson Products, based in Traverse City, is a long-time supplier of accessories for travel trailers and motor homes. The company's business has been both struggling and growing, according to owner Bob Brammer.
In order to survive in this tough economy, Stromberg Carlson reduced both office and production staff. "Having a desk job also meant working equipment," says Brammer, a third generation owner of the family business. "We are expanding employment again slowly."
"As other suppliers fall or trip, we pick up their business. We are growing. So we are tightening our belts, expanding our product line and expecting to continue to expand in a market that is stagnant." BN