OESA News 2016 Fourth Quarter, Edition 1

NEWS

Original Equipment Suppliers Association

2016 Fourth Quarter │ Edition 1

NHTSA Symposium │ Photo by: Tim O'Leary

IN THIS ISSUE...

3 4 6

The Suppliers' Voice New Supplier Members New Affiliate Members

7 8 9

Legal Corner Guest Column Supplier Outlook

10 12 14

This edition is sponsored by

Upcoming Events OESA Annual Conference MEMA Events

Keeping automotive suppliers ahead of the curve More than 200 automotive suppliers choose us as their trusted legal counsel because:

Expertise • Our automotive attorneys represent only suppliers, so there’s no inherent conflict that comes from representing OEMs and suppliers.

• Our record of innovation and results spans supply chain terms & conditions, intellectual property, warranty & recalls, antitrust, M&A, litigation and more than 60 other areas of legal practice.

Leadership • We are co-founders of MICHauto.

• We serve as legal counsel to the Sales Executive, Legal Issues and Young Leadership Councils of the Original Equipment Supplier Association (OESA).

Value • The value we deliver to clients stems from our Midwest principles. We’re hard working, practical and put a focus on teamwork.

• Alternative fee arrangements allow us to focus on results, not the ticking of the clock.

We’ll help you prepare for the curves ahead.

Visit WNJ.com or contact either co-chair of our Automotive Industry Group:

thomas Manganello tmanganello@wnj.com +1.248.784.5007

Michael Brady mbrady@wnj.com +1.248.784.5032

Read AheadOfTheCurve.wnj.com The definitive law blog for navigating the automotive supply chain 2 │ OESA News - 2016 Fourth Quarter

A Better PArtnershiP ® By providing discerning and proactive legal counsel, we build a better partnership with clients.

Voice

The Suppliers’

Julie A. Fream

President and CEO

OESA Fosters Critical Dialogue with NHTSA

At the end of September, OESA hosted key officials from the National Highway Traffic Safety Administration (NHTSA) Vehicle Safety Team and nearly 60 automotive supplier member executives. The goal of the “supplier symposium” was to foster candid dialogue and an open exchange of information on the key supplier concerns and NHTSA initiatives. In partnership with the Motor & Equipment Manufacturing Association (MEMA) advocacy team in Washington, D.C., we continue our commitment to advancing the supplier community’s business interests on regulatory and legislative issues.

With suppliers taking the lead on many of the new safety technologies in vehicles today, this type of dialogue is critical to the future of the industry. An understanding of NHSTA’s initiatives, policies and expectations is a must in this new industry landscape.

During the meeting, Nat Beuse, Associate Administrator for NHTSA’s Office of Vehicle Safety Research, discussed how the vast range of topics covered by the research program at NHTSA can present opportunities for suppliers to educate and engage the agency. At the same time, NHTSA’s research program – like a lot of other federal agencies – has finite resources.

Therefore, input from the industry can be particularly helpful.

NHTSA’s Director of Vehicle Crash Avoidance and Electronic Controls Research, Cem Hatipoglu, and Director of Vehicle Crashworthiness Research, Stephen Ridella, reviewed some of the “hot topics” their respective research teams are examining. Subjects such as automated vehicles, connected vehicles, advanced safety technologies, alcohol detection, driver distraction, seat belt reminders, oblique frontal impact, battery and alternative fuel safety, child side impact, elderly occupants, and next generation tools (THOR, WorldSID, etc.) were discussed. Hatipoglu emphasized the importance of learning from industry about the various technologies and using this information to inform NHTSA’s research and other activities.

Suppliers also heard from NHTSA staff representing defects investigation, chief counsel and government affairs. NHTSA was clear that the agency is focused on proactive safety and finding ways to get in front of issues. Voluntary agreements from OEMs to make automatic emergency braking systems standard equipment and the creation of the AutoISAC to address cybersecurity were cited as ways the industry can get in front of these fast-paced issues.

To learn more about NHTSA initiatives, we hope you will join us at the OESA Annual Conference on Nov. 2, 2016, as we host NHTSA Administrator Dr. Mark Rosekind. He will address the theme of this year’s conference, “An Industry at a Crossroads.”

As always, please feel free to contact me with comments and questions at 248.430.5963 and jfream@oesa.org.

OESA News - 2016 Fourth Quarter

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OESA MEMBERS

DISCOVER THE VALUE OF OESA MEMBERSHIP Become an OESA member and join more than 430 supplier companies and affiliate organizations that are already represented by OESA. OESA champions the business interests of the supplier community in North America through government advocacy initiatives, relevant industry events and analysis, networking forums, global connections and the expertise of automotive thought leaders.

Through OESA, members stay abreast of the industry and have access to exclusive information to make critical business decisions.

To learn more about becoming a member of OESA, contact: Steve Horaney Vice President, Membership and Sales

Brenna McCann Senior Manager, Membership and Sales

248.430.5969 shoraney@oesa.org

248.430.5970 bmccann@oesa.org

WELCOME NEW SUPPLIER MEMBERS 300 Galleria Officentre, Suite 501, Southfield, MI 48034 Tel: (248) 728-8634 │ www.chassix.com Member Rep: Douglas DelGrosso, CEO Alternate Rep: Safi Hamid, Vice President, Sales Chassix is a $1.6 billion, privately-held global automotive supplier. The company is focused on delivering high-quality, precision ductile iron and aluminum chassis components, with more than 4,500 employees in 23 locations in every key region of the world.

255 Rex Boulevard, Auburn Hills, MI 48326 Tel: (248) 237-7800 │Fax:(248) 586-9519 │www.cspplastics.com Member Rep: Robert T. Simon, Vice President, Strategy Alternate Rep: Michael Senerius, Vice President, Sales & Marketing With more than 50 patents covering materials development and manufacturing processes, Continental Structural Plastics is a true pioneer in composite materials formulation, design and manufacturing technologies. It incorporates computer-aided engineering and design into every phase of the process, which provides customers with leading-edge, lightweight materials technologies and solutions for the automotive, heavy truck, building and construction industries.

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OESA MEMBERS

100 West Big Beaver Road, Ste 200, Troy, MI 48084 Tel: (248) 321-6416 │ www.eldor.it Member Rep: Marco Arienta, Sales Director North America Alternate Rep: Robert Kaylor, Account Representative Eldor Corporation is a leader in research, development and the production of ignition coils, electronic control units for controlling combustion based on analysis of current ionizing, and electric hybrid-systems. Thanks to the know-how, skills development and time-to-market sense, Eldor is one of the first companies in the world that can provide high-technology products and excellent quality; satisfying the growing demand for highly innovative solutions from the major automobile and motorcycle groups. Eldor products meet all the national and European prescriptions regarding the respect for the environment, as well as internal regulations of the automotive market.

6161 Underwood Rd., Pasadena, TX 77507 Tel: (713) 503-6373 │www.kaneka.com/kaneka-americas Member Rep: Kazuhiko Fujii, President Alternate Rep: Toshihiko Kanda, R&D Manager Kaneka Corporation, is a $5 billion producer of chemical products including resins, life science, food stuff, synthetic fibers and electronics. It was established in 1949 when its main products were caustic soda, soap, butanol, edible oils and electric wires. The company later diversified into polymers, fermentation, biotechnology and electronics, and other fields. Business activities now span a broad range of markets: synthetic resins, resin products, chemicals, foodstuffs, pharmaceuticals, medical devices, electronic products and synthetic fibers. Its 3,400 employees (9,400 including subsidiaries) are meeting customer needs on all continents; Kaneka has overseas subsidiaries in the United States, Belgium, Singapore, Malaysia, Australia, China, India, Brazil and other countries.

5005 E. McDowell Rd., Phoenix, AZ 85008 Tel: (602) 244-6600 │www.onsemi.com Member Rep: Daryl Hatano, Vice President, Government & External Affairs Alternate Rep: David Somo, Vice President, Corporate Marketing ON Semiconductor provides robust, AEC-qualified, PPAP-capable products for automotive applications, including active safety & autonomous driving; vehicle electrification; connectivity; LED lighting; and fuel economy & emissions reduction.

Michigan Sales Office 39555 Orchard Hill Place Suite 230, Novi, MI 48375 Tel: (248) 449-3323 │www.toyobo-global.com Member Rep: Kelly Matsubara, Sales Assistant & CAE Center Manager Alternate Rep: Manabu Takeuchi, General Manager Toyobo Engineering Plastics is a category leader in its core technologies of polymerization, modification, and customization. It has been contributing development and technical support to Japanese OEM’s since the 1970’s. Its specialized product line-up of resin raw materials is now available in the North American market with local compounding in the U.S. and Mexico.

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OESA MEMBERS

WELCOME NEW AFFILIATE MEMBERS 2000 Town Center, Suite 900, Southfield, MI 48075 Tel: (248) 368-8900 │ www.bakertilly.com Member Rep: Marie Galindo, Senior Manager, Mexico Growth Services Baker Tilly helps companies expand abroad with lower risk, faster time to market, and superior outcomes. For companies that do not yet operate abroad, Baker Tilly helps them expand internationally the right way from the onset. For companies already abroad, it helps them fix international-related issues.

Founded in 1931, Baker Tilly Virchow Krause, LLP is a full-service global market expansion, accounting and advisory firm. Its market presence via a network of 800 offices in 141 countries places our 28,000 professionals is an extension of its customers' team in reaching global growth objectives.

6021 Wallace Road, Ste 300, Wexford, PA 15090 Tel: (412) 933-1180 │ www.Directworks.com Member Rep: Lisa Kustra, Executive Vice President Alternate Rep: Greg Anderson, President Directworks provides a better way for manufacturers to work across teams and with suppliers to develop, launch and deliver more profitable products. Leading manufacturers use Directworks’ cloud-based platform to more effectively engage stakeholders and suppliers at any stage of the product lifecycle to achieve greater product success.

Directworks enables a higher degree of supplier engagement that promotes valuable product innovation, speed to market and cost improvements. Customer teams will improve product costs by using their time, and better information, to make smarter, data-driven supply decisions. The result will be a direct materials supply chain that is cost competitive and delivers high quality parts at lower risk.

280 Daines Street, Suite 300, Birmingham, MI 48009 Tel: (248) 765-2055 │ www.m1concourse.com Member Rep: Jordan Zlotoff, Director, Business Development Alternate Rep: Brad Olehansky, Founder and CEO M1 Concourse is both a private club and public destination designed to leverage the passion of the largest concentration of car enthusiasts in the world. The community of private garages will soon accommodate more than 1,000 classic cars set along a 1.5-mile performance track. A large portion of the project is open to the public, where people can enjoy restaurants, a walkable village of auto-focused businesses and year-round programming, including car shows, concerts, product demonstrations and more. The idea for M1 Concourse grew directly and organically from the needs of the local auto enthusiast community. Complete details can be found at www.m1concourse.com.

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LEGAL CORNER

TRAPPED IN AN UNPROFITABLE CONTRACT? MAYBE NOT: EXIT STRATEGIES YOU NEVER KNEW YOU HAD Jeena Patel Partner │Warner Norcross & Judd LLP jpatel@wnj.com │ 248.784.5025

You know the drill. You have an opportunity to win a huge contract for your company, but the customer terms and conditions are one-sided and onerous, and you don’t have a unique product to give you the leverage to negotiate more balanced terms. But, the rewards outweigh the potential risks (or so you think), so you move forward, accepting all of the customer’s purchase orders and terms and conditions.

Then two years into the program, your worst fears materialize and there’s a raw material shortage and prices go through the roof. Your contract goes from being a “must have” deal to a “must dump” deal because it’s costing your company millions of dollars. What now? You’re trapped in a bad deal with several more years. But, are you really stuck? A closer look at the quantity and duration terms of your contract may prove otherwise.

Often times, despite what suppliers may believe based on having received and quoted to the customer’s estimated program volumes, suppliers don’t have a “requirements” contract with their customers. Instead, they have nothing more from their customers than a blanket purchase order that is subject to releases. Those are the same thing, aren’t they? The answer is no, they aren’t. Even though some in the industry use the terms interchangeably, they are two distinct types of documents with vastly different consequences for both the supplier and the customer.

Under a requirements contract, the supplier must supply to the customer, and the customer must buy from the supplier, some specified portion of the buyer’s requirements for the parts for the duration of the contract. Unlike in a requirements contract, there is no language in a blanket purchase order mandating that the customer purchase its requirements from the supplier. Even if it includes language purporting to require the supplier to supply the customer’s requirements, a blanket purchase order typically includes language that limits the customer’s obligations to purchase only those quantities specified in a release. The customer has the option, not the obligation, to issue releases for the

parts. The blanket purchase order simply sets the pricing and other terms that apply if the customer issues, and the supplier accepts, a release. In other words, each release is a separate contract, which the supplier is free to accept or reject.

So, if you’re operating under a blanket purchase order rather than a requirements contract, after you fulfill the last accepted order, you likely have the ability to reject all future releases and terminate the relationship or simply to reject future releases until you obtain the improved terms that you need. Of course, all contractual relationships are unique, and there is certainly a possibility that a judge or jury could find that you have a requirements contract created by conduct (i.e., your course of performance or course of dealing with your customer). But, this is undoubtedly an option to explore with counsel in the event that you need to get out of a losing agreement.

The absence of an enforceable requirements contract, however, isn’t your only potential leverage point.

Sometimes contract duration is the key to your escape from a bad deal. Where a purchase order includes a placeholder end year, such as 9999, lacks an end date entirely, or purports to go on indefinitely, a supplier should seek to avail itself of the benefits of Section 2-309 of the Uniform Commercial Code, which provides that such a contract is valid for a reasonable time, but can be terminated at any time by either party. In other words, even if the vehicle program has another four years on it, you may have an opportunity to terminate the contract early or to renegotiate with your customer.

Even if you don’t have a contract of an indefinite duration, if your purchase order automatically renews after a limited time period, you can exit, thus limiting the impact of an unfavorable contract. You must, however, actively monitor the date by which you provide notice of non-renewal and act accordingly. Or, if your customer is not proactively seeking a replacement supplier, your timely notice of non-renewal may well catch your customer unprepared to resource fast enough to avoid an interruption in supply, and, thus, unable to deny your requested revised terms to continue supplying the parts. In fact, for those customers for whom you supply parts on multiple programs, you may also be able to leverage the non-renewal or expiration of one purchase order to obtain improved terms on all of them.

In sum, if you find yourself itching to get out of a losing or otherwise undesirable supply relationship, don’t assume that you’re trapped. You may be able to leverage the deficiencies or gaps in the contract documents with your customer to escape the relationship altogether, or more likely, to negotiate your way to a better deal. Obviously, these tactics could backfire and do more long-term harm than good if you use them on a significant customer. So, before you go playing hardball, talk to a legal professional and your key business people to make sure you’re on solid ground, both from a legal and strategic perspective. Of course, these same creative exit/negotiating tactics could be used against you by your own suppliers, so be sure that you proactively protect yourself against them too.

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GUEST COLUMN

MEXICO: AUTO SUPPLIERS NEEDED FOR KEY COMPONENTS Doug Donahue Vice President of Business Development│Entrada Group jpatel@wnj.com │ 248.784.5025

As a production location for the North America market, Mexico is a destination that is becoming increasingly difficult for Tier 2 and Tier 3 suppliers to ignore.

Seven out of the top ten global automakers now manufacture light vehicles in Mexico, which is the world’s seventh-largest producer in that category. According to industry analyst IHS Automotive, auto OEMs alone invested more than $35 billion in new or expanded production facilities in Mexico throughout the past 15 years. Currently, more than 48 car and light truck models are produced in Mexico, and the list of large Tier 1 auto suppliers present in the country is a "Who’s Who" list of industry powerhouses.

While these superlatives are impressive and the horizon looks promising, there is a glaring area of concern in Mexico’s auto manufacturing sector and it may prove to be an Achilles heel that hinders future development and expansion. Mexico’s supply base, particularly beneath the Tier 1 level, needs help.

This shorage of Tier 2 and Tier 3 suppliers is a key finding in the latest white paper from Entrada Group, which guides manufacturers from around the world in establishing their own production footprint in Mexico in order to provide a competitive advantage.

The 2016 survey of 100 auto suppliers reveals that while the presence of a reliable Mexico supply chain is paramount, quality concerns remain.

Ninety percent of respondents currently producing in Mexico said that a strong Mexico supply chain is “very important,” but 23 percent of that same group labeled Mexico’s supply base as “Poor.”

To cite just two examples, Mexico sources most of its resin from the U.S. and Europe, and lacks access to some of the more sophisticated processes, such as injection molding. About 70 percent of Tier 2 and Tier 3 basic components used in Mexico are imported into the country, according to Dietmar Ostermann, PwC’s global automotive advisory leader. That includes $6.4 billion in injection-molded components.

To learn more about the need for certain components in Mexico’s auto sector, download the full white paper: “Despite Billions in Investment, Supply Challenges Remain for Mexico’s Auto Sector” from http://www.entradagroup.com/whitepaperdespite-billions-in-investment-supply-challenges-remain-for-mexicos-autosector/.

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SUPPLIER OUTLOOK

PREDICTING HIGHER INTEREST RATES LABOR TURNOVER MAY BE THE KEY Charles Chesbrough Executive Director, Strategy & Research and Senior Economist 248.430.5953 │ cchesbrough@oesa.org

One of the big unknowns facing the automotive industry over the next year is the US Federal Reserve’s monetary policy.

In December 2015, the Federal Funds Rate, the primary tool of the central bank to impact interest rates, was increased for the first time since 2006. It was expected that additional rate hikes would follow in 2016, but weakness in the global economy, as well as US business investment, has caused a postponement. The general consensus is that tightening will continue, but when is uncertain, and by how much could have a significant impact on the automotive industry.

Deciding when interest rates should be adjusted is a difficult decision, but some metrics do provide guidance. The FED has stated they are concerned about inflation rising is the US economy, and a robust labor market is a key threat. Now that the last recession ended over seven years ago, and unemployment is very low, the potential for the demand for labor to greatly exceed supply is rising. This imbalance will lead to higher wage rates, which will eventually lead to higher prices for consumers, and thus create inflation.

Based on recent data from the US Labor Department, there are mixed signals as to whether this wage inflation is an immediate threat to the economy.

The labor market in the United States appears to be quite strong. The unemployment rate currently stands at 4.9%, far below the long-term average of 6%. In addition, weekly jobless claims – workers who have made unemployment insurance applications to state agencies – currently stands near 40 year lows. These results reflect strong labor conditions in the US economy, and wages should rise as a result, but other data is not as clear.

The recent Job Opening and Labor Turnover Survey (JOLTS) – see chart - revealed that opportunities for workers are at post-recession highs, but workers appear not confident enough, yet, to take advantage. The number of job openings for all workers in the US economy rose to 5.9 million openings in the July report, a level not seen since December 2000. However, the survey also showed wage growth of only 2.5%, far below the 3%-3.5% levels thought to be needed to drive inflation.

They key reason: opportunities are only part of the equation as the other part is whether workers are taking advantage.

Labor turnover, workers who have left their job for another position, still remains relatively low. From the JOLTS report, Job Quits per 100 employed for all workers is rising, but it still remains below pre-recession levels. For workers in manufacturing, Job Quits are also rising but they are even further below pre-recession levels than for all workers. These data suggest that the employed, particularly in manufacturing, are still reluctant to “jump ship” for other opportunities, or they are unaware of the strength of the overall labor market. In theory, high turnover is necessary in order to force management to increase wages for workers, and recent data suggests confidence to make a job change still remains relatively low.

The FED will be watching the JOLTS report over coming months to see if these data change substantially. However, based on the direction the labor market has been heading, employers will likely have to pay more or higher turnover will come, and higher interest rates will soon follow.

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OESA EVENTS OESA Board of Directors Chairman of the Board Samir Salman* CEO NAFTA Region Continental Automotive Systems, Inc. Immediate Past Chairman Daniel E. Sceli* President and CEO Peterson American Corporation Vice Chairman Mike Mansuetti* President Robert Bosch LLC Vice Chairman Michael E. Martini* President, Consumer OE Bridgestone Americas Officer Julie A. Fream* President and CEO Officer Steve Handschuh* President and CEO Motor & Equipment Manufacturers Association *Executive Committee

Directors Oscar Albin Executive President INA, National Association of Automotive Parts Manufacturers in Mexico Paul Barnett President Principal Manufacturing James Bradbury President Grand Rapids Controls Company LLC Laurent Bresson President and Global CEO Nexteer Françoise Colpron CEO North America Valeo David C. Dauch Chairman and Chief Executive Officer American Axle & Manufacturing (Continued on page 11)

FIAT CHRYSLER AUTOMOBILES TOWN HALL MEETING │ OCT. 4 OESA is pleased to host a Fiat Chrysler Automobiles (FCA) Town Hall meeting for OESA members on Oct. 4, 2016, at the COBO Conference Center in Detroit, Mich. This meeting is an opportunity to hear from Scott Thiele, head of purchasing and supplier quality, FCA - North America, and speak with key decision makers from FCA supply chain management; purchasing and supplier quality; quality; engineering and manufacturing.

This town hall is critical to suppliers. FCA recently announced major changes to improve supplier relations, support incremental production and support the launch of several critical programs. Additional initiatives address specific supplier concerns including tooling reimbursement and returnable container management. In addition, FCA has improved communication of assembly plant production schedules with weekly Tier 1 conference calls.

Additional FCA senior executives will join Thiele for the town hall question and answer session.

The main networking session with the FCA executives will be from 1 – 2 p.m. with all component and material purchasing groups available for one-on-one supplier networking. Additional networking will follow the formal meeting.

HONDA NORTH AMERICA TOWN HALL MEETING │ OCT. 13 OESA members and industry guests are invited to join Tom Lake, vice president, North American purchasing, Honda North America, Inc., and additional Honda purchasing executives for a town hall meeting, individual one-on-one conversations and an update on Honda in North America. The fifth annual OESA Honda North America Town Hall will be held on Oct. 13, 2016, at Burton Manor, Livonia, Mich.

Lake will be joined by additional senior Honda executives for a town hall question and answer session.

This is an important town hall to attend as more than 97 percent of Honda and Acura automobiles sold in the U.S. are produced in North America. In 2014, Honda manufactured a record 1.8 million automobiles in North America that was supported by $26.5 billion in parts and materials procurement in the region from 713 suppliers.

(Continue on page 11)

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OESA EVENTS Honda now operates eight plants in the region, including four in the U.S. that have a total capacity of 1.92 million vehicles.

Honda executives will be available for networking with attendees beginning at 1 p.m. The town hall program will run from 2 p.m. to 3:30 p.m. and includes a corporate update, followed by the town hall style question and answer session. Honda executives will also be available after the event to speak individually with attendees.

OESA members and industry guests may register in the events section of http://www.oesa.org. For registration assistance, contact OESA at 248.652.6401 or info@oesa.org.

OESA Board of Directors (Continued from page 10)

Directors Jacqui Dedo Co-Founder Aware Mobility LLC. Paul Doyle CEO Coastal Automotive John Dunn President and CEO, The Americas Plastic Omnium Auto Inergy Douglas J. Grimm President & COO MPG Inc.

OEM TERMS AND CONDITIONS OCT. 21 OESA and Butzel Long are planning the annual OEM Terms and Conditions briefing to discuss the industry’s current legal and commercial issues. The meeting and webinar will focus on relevant supply chain issues, recent case law and emerging topics of importance to suppliers. Registration information coming soon. ► SUPPORTING PARTNER

Michael Haughey President North American Stamping Group Ramzi Hermiz President and CEO Shiloh Industries, Inc. Don Manvel Chairman and CEO AVL Americas Lon Offenbacher President and CEO Inteva Products Michael Robinet Managing Director IHS Automotive Wes Smith President and CEO E & E Manufacturing Co., Inc. Armando Tamez CEO Nemak Jim Teets President and CEO ADAC Automotive Nigel Thompson President and CEO Yazaki North America, Inc. James Verrier President and CEO BorgWarner Inc.

For more information and to register, visit oesa.org, or call OESA at 248.952.6401.

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OESA EVENTS

OESA 2016 ANNUAL CONFERENCE THE INDUSTRY AT A CROSSROADS │ NOV. 2 2016 OESA Annual Conference

The Industry at a Crossroads

November 2, 2016 │COBO Center │Detroit, Michigan

Register now for the 18th Annual Conference on Nov. 2, 2016 at COBO Conference Center in Detroit, MI. This year’s conference, “The Industry at a Crossroads” promises to deliver key insights, discuss important trends and provide actionable recommendations to stay abreast of the industry’s new direction.

Confirmed Presenters Include:

• Charles Chesbrough, Executive Director, Strategy & Research and Senior Economist, OESA • Brian Daugherty, Chief Technology Officer, MEMA • Glen DeVos, Vice President Services Business Unit, Delphi • Nakul Duggal, Vice President, Product Management, Qualcomm Technologies, Inc. • Julie A. Fream, President and CEO, OESA • Craig Giffi, Vice Chairman and U.S. Automotive Leader, Deloitte LLP • Jan Griffiths, Vice President, Supply Chain Management, Inteva Products • Ramzi Hermiz, President and CEO, Shiloh Industries, Inc. • Sarah House, Vice President and Economist, Wells Fargo Securities, LLC • Rich Karlgaard, Publisher of Forbes, and Author, “Team Genius: The New Science of High-Performing Organizations” • John McElroy, Host, Autoline Daily • Xavier Mosquet, Senior Partner and Managing Director, Boston Consulting Group, Inc. • Emily Kolinski Morris, Chief Economist, Ford Motor Company • Michael Robinet, Managing Director, IHS Markit • Dr. Mark Rosekind, Administrator, National Highway Traffic and Safety Administration • Gary Silberg, Partner, The Americas Head of Automotive, KPMG • Michael Siwajek, Ph.D., Director of Research and Development, Continental Structural Plastics • Paul Traub, Senior Business Economist, Federal Reserve Bank of Chicago • Tolga Tuksal, Director of Corporate Purchasing, MPC, Inc. • Carrie Uhl, Vice President of Procurement, Magna International • Ann Wilson, Senior Vice President, Government Affairs, MEMA New for this year’s event are three concurrent breakout sessions that will explore the industry’s opportunities and challenges:

• Leading Through Uncertainty • Tier 1 Purchasing Strategies and Opportunities • Advanced Vehicle Technology - The Increasing Pace of Innovation

A limited number of event partnership opportunities are still available. Promote your product or service to more than 700 automotive industry executives and receive free tickets to the automotive supplier-centric event of the year through an exclusive partnership or exhibitor agreement.

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For partnership information contact: Brenna McCann Senior Manager, Membership and Sales 248.952.6401 bmccann@oesa.org

INSIDE OESA

OESA PARTNERS WITH THE AUTOMOTIVE NEWS PACE AWARDS TO PROMOTE SUPPLIER INNOVATION The Original Equipment Suppliers Association (OESA) is pleased to announce it is a Lead Sponsor for the 2017 Automotive News PACE Awards. For more than 20 years, the annual PACE (Premier Automotive Supplier’s Contribution to Excellence) Awards has honored superior supplier innovation in automotive systems, processes and connectivity.

Winners will be announced on April 3, 2017, at the annual black-tie awards ceremony at the Max M. and Majorie S. Fisher Music Theater in Detroit, Mich. The awards ceremony spotlights the contributions of the supplier community in the automotive industry’s technological advancement and business performance.

Information for the awards and event are available at autonews.com/pace.

OESA/MERA

CONFERENCE CENTER AVAILABLE FOR RENT

The OESA/MERA Conference Center is a full-service meeting facility and professional venue for meetings, training seminars and small conferences. It offers tailored service options from simple room rental to fully-staffed provisions and custom catering. The center features a state-of-the-art presentation system, free Wi-Fi, separate meeting café and on-site staff.

Centrally-located in the Detroit Metro area at the Riverside Center Building in Southfield, MI, guests are greeted in the main lobby by building security staff and directed to the Conference Center on the 3rd floor.

For rental information, contact OESA at 248.952.6401.

ARE YOU GETTING OESA UPDATES? UPDATE YOUR EMAIL FILTERS AND FIND OUT!

To better serve you, we recently updated our email server IP addresses. As a result, you may not be receiving OESA email updates on industry events, news and information that directly affects your business. If that’s the case, give this information to your IT team to update your organization’s email filters.

Please “whitelist” the following IP addresses:

136.147.131.11

136.147.131.12

136.147.131.13

136.147.131.15

136.147.131.16

136.147.131.17

136.147.131.14

Also, set your filters to receive emails from info@oesa.org and info@mema.org.

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MEMA EVENTS

TALK OF THE TOWN:

MEMA SUBMITS COMMENTS ON CAFE/GHG MIDTERM EVALUATION DRAFT TAR On Sept. 26, MEMA submitted comments on the draft technical assessment report (TAR) to the midterm evaluation of the light-duty vehicle greenhouse gas emission (GHG) standards and corporate average fuel economy (CAFE) standards for MYs 2022-2025. The U.S. Environmental Protection Agency, U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) and the California Air Resources Board (CARB) Industry provided 60 days to comment on the draft TAR report, which is over 1,200 pages.

“In order for the National Program’s targets to be realized for the outlying years of the standards, the draft TAR analysis indicates that steep efficiency gains will be needed. It is important to have a variety of technology strategies from which OEMs can choose,” stated MEMA in its comments. “Ultimately, the OEMs must make the difficult choices about which technologies they end up deploying in their fleet. As such, suppliers must invest heavily to offer multiple technology solutions intended to support a variety of vehicle manufacturers’ strategies and meet different platforms’ goals.”

Generally, MEMA urged the agencies to further evaluate and address some key areas of the draft TAR analysis. In its comments, MEMA addressed the following key subject areas: improved utilization of credits for off-cycle technologies; agencies’ discrepancies in the TAR’s technology deployment and pathways analysis; harmonization and alignment between the EPA and NHTSA programs; and, other observations on other technologies and credits.

“This is a technical report, not a policy or decision document,” clarified the agencies in the Executive Summary statement. “The information in this report, and in the comments we receive on it, will inform the agencies’ subsequent determination and rulemaking actions. The agencies will fully consider public comments on this Draft TAR as they continue to update and refine the analyses for further steps in the MTE process.”

While not a decision document, the draft TAR does inform the agencies as they move forward in the midterm evaluation process that was mandated in the standards’ final rule.

The agencies are expected to issue a proposed determination and open a notice-and-comment process in mid-2017.

For more information, please contact MEMA staff: Leigh Merino │ lmerino@mema.org

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Laurie Holmes │ lholmes@mema.org

OESA EVENTS

CALENDAR OF EVENTS UPCOMING OESA EVENTS AND ACTIVITIES Oct.

21 Nov.

2

Nov.

10

REGISTER NOW! OESA OEM Terms & Conditions and Current Legal Issues MSU Management Education Center Troy, MI REGISTER NOW! OESA Annual Conference COBO Conference Center Detroit, MI

REGISTER NOW! OESA and Harbour Results Inc. 2016 Automotive Tooling Update The Dearborn Inn Dearborn, MI

OESA OEM TOWN HALLS Oct.

REGISTER NOW! FCA Town Hall Meeting COBO Center, Detroit, MI

Oct.

REGISTER NOW! Honda Town Hall Meeting Burton Manor, Livonia, MI

4

13 Dec.

2

UPCOMING COUNCIL MEETINGS* Oct.

6

Oct.

11

Oct.

20 Oct.

26 Oct.

27

REGISTER NOW! OESA Young Leadership Council – Alumni Event OESA Conference Center Southfield, MI REGISTER NOW! Legal Issues Council OESA Conference Center Southfield, MI REGISTER NOW! OESA Young Leadership Council 5 OESA Conference Center Southfield, MI

REGISTER NOW! Communications Executives & Automotive Public Relations Councils Joint Meeting OESA Conference Center Southfield, MI REGISTER NOW! Human Resources Council OESA Conference Center Southfield, MI

REGISTER NOW! OESA Members Only!

Ford Town Hall Meeting Ford Headquarters, Dearborn, MI

*Open to council members & invited guests.

For more information and to register, visit oesa.org, or call OESA at 248.952.6401.

OESA News - 2016 Fourth Quarter

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Original Equipment Suppliers Association Check out our online publication at www.oesa.org/news

25925 Telegraph Rd., Ste. 350 │Southfield, MI 48033-2553 248.952.6401 │oesa.org │info@oesa.org Connect with us on

OESA News is provided by the OESA Communications Team.

April Buford Director, Communications

Jeff Laskowski Manager, Communications

Alia Bazzi Website and Graphic Designer

248.430.5964 abuford@oesa.org

248.430.5950 jlaskowski@oesa.org

248.430.5958 abazzi@oesa.org