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Moving Forward

Neil De Koker discusses OESA and the future of the industry

By Marcus Amick

Page 38-39

As founder of Original Equipment Suppliers Association (OESA), you have been instrumental in helping to address some critical issues facing the industry. What accomplishment are you most proud of during your tenure with the organization?

Overall, I am very proud of the fact that OESA is now an established and respected industry institution representing the voice of suppliers and serving as a resource for suppliers to address their issues. OEMs recognize and respect OESA as a representative voice of suppliers and one that seeks positive solutions to industry issues. Suppliers look to OESA as a trusted, reliable resource to help address their issues.

On a specific event basis, I would say that the financial crisis of 2008-09 was the period when the true value of OESA was really established. OESA played a key role in representing the voice of suppliers in Washington, D.C., and helped to convince government that GM and Chrysler’s bankruptcy needed to be supported in order to prevent the collapse of the industry and the loss of several million more jobs at a time when the country desperately needed to stabilize the economy and start to grow jobs. At the same time, OESA provided a forum for suppliers to help each other take the necessary steps to assure the survival of their companies during the biggest downturn in vehicle production in many decades.

How has the auto industry changed during your tenure with OESA?

There is more respect and a much better understanding of the mutual interdependence between the OEMs and suppliers throughout the value chain. The market share for the domestic OEMs has stabilized and their balance sheets have been significantly strengthened. As a result, the desperate survival behavior of the previous decade has been eliminated. Both suppliers and OEMs have eliminated a lot of previous excess capacity and are now operating at high-capacity utilization, resulting in a strong and profitable industry overall.

There is a strong need for new technology to capture consumers’ interests and to meet the very demanding improvements in fuel economy. This is also promoting a stronger and more positive relationship between suppliers of new technologies and their OEM customers. This is a challenging and demanding time, but also a very good time to be a part of this great industry.

How has the landscape for domestic suppliers changed during the industry’s resurgence?

The industry is rapidly becoming global with global vehicle platforms, which creates a lot of demand by the OEMs on their suppliers to be able to serve the OEMs wherever they operate in the world. To manage currency risk, logistics and quality, there is increased pressure on localization where the OEMs want to purchase parts where they build and sell their vehicles. This is creating strong demands for suppliers to be global, which can be very big decisions for those companies who would prefer to remain regional and avoid the challenges of operating in many countries with different languages and cultures and regulations. Today, it is more difficult to remain strictly a local supplier.

What will it take for the auto industry to maintain the level of success that it’s had over the past couple of years?

It takes a stable, growing economy with a continued reduction in unemployment, and a government that promotes a positive business environment with a minimum of new, restrictive regulations.

How has the technological explosion in today’s vehicle impacted suppliers?

Seventy percent of new technology in vehicles comes from suppliers. The OEMs are very interested in new technologies that attract consumers to their products, as well as technologies that help improve fuel economy, emissions and safety to meet increasingly stringent regulations. This “environment” provides greater opportunities to promote new technologies to customers who are more eager to evaluate them than ever before.

What does the new OESA President and CEO Julie Fream bring in helping to move the industry forward?

Julie is a proven executive with 30 years of experience in the industry. She has worked at GM and Ford and at TRW and Visteon, giving her a strong foundation of how the industry operates and interacts. She has experience in production, engineering, planning, sales, and marketing and communications. She was an officer at Visteon during their bankruptcy and has firsthand experience in dealing with the very difficult issues companies face during such a crisis. She is well connected in the industry and knows many of the senior executives at suppliers and OEMs. Julie has a strong reputation for her collaborative management style and has very strong communication skills. She can readily facilitate bringing parties together to address issues and to come up with win-win solutions that will take the industry forward.

What’s next for Neil De Koker?

I will continue to stay active in the industry, while also having more time to spend with my family and friends. I currently serve on the board of several non-profits including the Automotive Hall of Fame, the Center for Automotive Research and Kettering University. I am also on the board of a couple of automotive suppliers and am considering a couple of advisory roles. Finally, I am a judge for the Automotive News PACE Supplier Innovation Awards where we annually recognize suppliers who have developed the most innovative commercialized products. That will keep me busy.

 Marcus Amick is a metro Detroit freelance writer.