OESA News 2018 First Quarter Edition 1

NEWS

Original Equipment Suppliers Association

2018 First Quarter │ Edition 1

Jan. 17-18

North American International Auto Show Tours at COBO Center - Detroit, MI

IN THIS ISSUE...

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The Suppliers' Voice Supplier Barometer

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Guest Column MEMA Summit

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OESA Events Calendar of Events

This edition is sponsored by: OESA News - 2018 First Quarter

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Voice

The Suppliers’

Happy New Year!

Julie A. Fream

President and CEO

"For the past two decades, This year marks OESA's 20th anniversary. Our founder, Neil De Koker, launched advancing the business interests of suppliers has been our OESA at CAR’s Management Briefing Seminars (MBS) in August 1998. That commitment to the industry." year, North America produced 15.6 million light vehicles; due, in part, to an unexpected 54-day strike at General Motors during the summer months. Global light vehicle production slipped during the 1998 calendar year, declining nearly two percent to 51.6 million units as manufacturers ran at 70 percent capacity.

So much has changed since then. Global light vehicle production is expected to be about 95 million in 2018; and globalization, consolidation, just-in-time manufacturing, and even bankruptcy have radically changed the industry’s landscape. Today’s mantra – mobility – is the norm as innovation and automated vehicles are driving technical advances. New vehicle manufacturers and powertrain technologies are leading the next phase of the automotive industry's evolution.

Regardless of what is happening in the industry, OESA ensures the voice and concerns of the supplier community are heard and addressed. For the past two decades, advancing the business interests of suppliers has been our commitment to the industry and it continues to drive our programming, advocacy efforts and global relationships.

In 2017, OESA developed more than 35 industry events to address the major concerns of our supplier members. From briefings on OEM terms and conditions, to the Mobility Supplier Forums in Silicon Valley and MEMA’s lobbying efforts in Washington, D.C., OESA has captured the pulse of the supplier community and represents its voice throughout the supply chain. Additionally, MEMA and OESA represent supplier interests on Capital Hill through supplier fly-ins, research on tax proposals and NAFTA, and influence on the U.S. legislative and regulatory priorities.

OESA also continues to provide unparalleled and direct access to OEM purchasing and engineering executives through the OESA/OEM Town Hall series. Each year, senior leaders from OEMs, including FCA, Ford, GM, Honda, Nissan, Rivian, Toyota and VW, share strategic initiatives and hold one-on-one networking opportunities with OESA members.

As OESA celebrates 20 years in the industry, members can continue to count on OESA to provide relevant and timely programming to support the needs of the supplier community. Looking ahead, the industry is facing a broad array of new opportunities and challenges. OESA will be there through all of the changes, representing the needs and concerns of the automotive OE suppliers. OESA is honored to support the supplier community and looks forward the next 20 years and beyond.

As always, please feel free to contact me at 248.430.5964 or jfream@oesa.org.

Sincerely

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SUPPLIER OPTIMISM ON THE RISE Mike Jackson Executive Director, Strategy and Research 248.430.5954 │ mjackson@oesa.org

Optimism is improving in the automotive supply base, albeit with a healthy degree of caution given the latest market dynamics.

The OESA Automotive Supplier Barometer, a quarterly survey of executives at North American automotive suppliers, found its industry outlook index (Supplier Barometer Index or "SBI") rising to 46 in Q4 2017, six points higher than the Q3 score, though two points lower than 4Q 2016.

Overall, opinions have become more optimistic across most revenue groups with smaller companies being the exception. Despite the improvement, inventories, production volumes and the political environment are holding sentiment below a neutral reading of 50.

When asked about finance and capital planning, suppliers are primarily focused on capital equipment purchases in meeting targets for the next 12 months. Talent also continues to be a planning focal point as additional staffing for salaried and hourly personnel ranks as the next highest priority.

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Suppliers remain active and engaged in assessing opportunities for acquisitions and divestitures compared to 2016. Acquisitions are being driven by larger companies' desire to gain access to technologies and expand their customer base. Alternatively, smaller companies are driving divestment activities due to the need to consolidate core business and selling off non-core technologies.

We're seeing optimism in the supply base from larger players keen to acquire new technology, as smaller companies focus on their core capabilities. Overall, suppliers must carefully assess new business opportunities to ensure resources and capital investment are optimized.

A full copy of the 4Q OESA Automotive Supplier Barometer survey results and the Sentiment Index chart are available on the OESA website at: https://www.oesa.org/resource/oesa-automotive-barometer-studies.

About the OESA Automotive Supplier Barometer: The OESA Automotive Supplier Barometer captures the pulse and analyzes the twelve-month business sentiments of top executives in the supplier industry. It is a bi-monthly snapshot of their concerns on commercial issues, the business environment and strategies that influence the supplier industry. This Barometer is distributed to vehicle manufacturers, financial institutions, governmental officials and the media to provide an on-going profile of the trends in the supplier industry.

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REGISTER TODAY FOR MEMA'S 2018 SUMMIT!

MEMA's 2018 Legislative Summit Tuesday, April 10 - Wednesday, April 11, 2018 Mandarin Oriental Hotel | Washington, DC

"It's an incredible opportunity because we actually get to go and talk to our Congressmen and Representatives about the key issues. It's powerful!"

-- Lynn Kier, Schaeffler Group USA, Inc

"[Members of Congress] want to see the employees, they want to see those folks flying in from Michigan or Indiana to come talk to them directly."

--Ian Musselman, Continental

Click on the image below to hear from more of your colleagues and their real-life testimony about the MEMA Summit and learn why this is a must-attend event each year.

For more information, please visit mema.org/dcsummit

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OESA EVENTS CONSUMER ELECTRONICS SHOW BRIEFING | JAN 8 The Original Equipment Suppliers Association (OESA) is pleased to host the 2018 Consumer Electronics Show (CES) Supplier Briefing on Jan. 8, 2018. The event will be held at the MGM Grand in Las Vegas. Senior industry analysts from IHS Markit will discuss innovative technologies and provide attendees with an expert preview of what to look for and be aware of at the 2018 Consumer Electronics Show.

IHS Markit analysts sharing insights on automotive electronics, automotive semiconductor, connected cars, software trends, ADAS and more include: • Dr. Egil Juliussen, director Infotainment & ADAS research, automotive • Colin Bird, senior analyst, automotive software, apps and services • Jeremy Carlson, principal analyst-autonomous driving, automotive • Mark Boyadjis, principal analyst & manager, automotive user experience OESA encourages members to register for the CES Briefing as soon as possible as space is limited.

Supporting Sponsors:

NORTH AMERICAN INTERNATIONAL AUTO SHOW TOURS | JAN 17 & 18 OESA invites supplier member executives to experience exclusive guided tours of the 2018 North American International Auto Show (NAIAS) with IHS Markit on Jan. 18, 2018. Participants will learn how future production vehicles and design concepts impact the supply base from a technology, procurement and global ER&D perspective.

Industry-leading analysts from IHS Markit will direct 90-minute tours on the show floor identifying strengths and weaknesses of OEM product strategies and platforms. These exclusive tours offer a unique opportunity for candid discussions on vehicles launched at the show and the business impact on the industry. The tours also enable OESA members to better focus on OEM product goals and objectives. Each tour will be conducted by vehicle and powertrain experts from IHS Markit.

OESA encourages members to register as soon as possible as space in each tour is extremely limited and not guaranteed. All tours on Wednesday, January 17, 2018, are now full.

Available tours for Thursday, January 18, 2018, include: 10:30 a.m. – 12:15 p.m.

11:30 a.m. – 1:15 p.m.

1 p.m. – 2:45 p.m.

2 p.m. – 3:45 p.m.

3 p.m. – 4:45 p.m.

Supporting Sponsors:

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OESA Board of Directors Executive Committee Chairman of the Board Mike Mansuetti President Robert Bosch LLC Immediate Past Chair Samir Salman CEO NA Region Continental Automotive Systems, Inc. Vice Chair Françoise Colpron Group President Valeo North America Vice Chair Ramzi Hermiz President and CEO Shiloh Industries, Inc. Officer Julie A. Fream President and CEO Original Equipment Suppliers Association

OESA EVENTS

THE AUTOMOTIVE SUPPLIER’S GUIDE TO 2018: BUCKLE UP AND GET READY FOR RAPID CHANGE | FEB 7 On Feb. 7, 2018, Warner Norcross & Judd LLP (WNJ) will present “The Automotive Supplier’s Guide to 2018: Buckle Up and Get Ready for Rapid Change,” at the MSU Management Education Center in Troy, Mich. This session will shed light on recent developments and trends that automotive supplier attorneys and senior executives should understand and prepare for as 2018 gets underway.

Rapid and volatile changes in the market and softening forecasts for industry volumes are warning signs that automotive suppliers should start preparing now to position and protect their operations. WNJ attorneys will discuss vital topics to help suppliers prepare for potential industry disruption.

Supporting Sponsor:

Officer Steve Handschuh President and CEO Motor & Equipment Manufacturers Association

Directors Oscar R. Albin Executive President INA, Industria Nacional de Autopartes A.C. Paul Barnett President Principal Manufacturing James Bradbury President Grand Rapids Controls Company LLC Michael Brosseau President Brose North America Frederick Cartwright Executive Director Clemson University International Center for Automotive Research (CU-ICAR)

OESA MEMBERS-ONLY GM TOWN HALL | FEB 16

OESA announces the annual members-only General Motors Purchasing/ Supply Chain Town Hall with Steve Kiefer, senior vice president, global purchasing and supply chain, General Motors, and members of his Global Purchasing & Supply Chain (GPSC) senior leadership team on Feb. 16, 2018, at the General Motors Design Dome in Warren, Mich.

The meeting offers OESA members the unique opportunity to hear the latest GM supplier initiatives and participate in an open question-and-answer session. One-on-one networking opportunities will be made available with GM executives following the formal meeting. This meeting is open to OESA members only.

Supporting Sponsors:

David C. Dauch Chairman and CEO American Axle & Manufacturing, Inc. (AAM) (Continued on page 11)

For more information and to register for OESA events and council meetings, visit oesa.org, or call 248.952.6401.

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CALENDAR OF EVENTS 2018 UPCOMING EVENTS

OESA Board of Directors (Continued from page 10) Jacqui Dedo Co-Founder Aware Mobility, LLC Paul Doyle CEO Coastal Automotive

Jan

OESA 2018 Consumer Electronics Show Supplier Briefing MGM Grand Las Vegas, NV

John Dunn President and CEO, The Americas Plastic Omnium Auto Inergy Division

Jan

North American International Auto Show Tours COBO Center Detroit, MI

Douglas J. Grimm Immediate Past Chairman of the Board, MEMA

Feb

2018 Legal Trends MSU Management Education Center Troy, MI

Feb.

General Motors Town Hall GM Design Dome Warren, MI

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Michael Haughey President North American Stamping Group, LLC Ken Hopkins President and CEO Neapco Holdings, LLC Kenichiro "Ken" Ito Executive Director DENSO Corporation Don Manvel Chairman and CEO AVL Americas Chris Obey President, Automotive Flex

UPCOMING OESA COUNCIL MEETINGS* Jan

Chief Executive Officers Council Butzel Long Detroit, MI

Jan

Legal Issues Council OESA Conference Center Southfield, MI

17 23 Jan

25 Feb

1

Feb

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Chief Purchasing Officers Council OESA Conference Center Southfield, MI Joint Environment, Health and Safety Council and Human Resources Council OESA Conference Center Southfield, MI Young Leadership Council 5 OESA Conference Center Southfield, MI

Lon Offenbacher President and CEO Inteva Products Michael Robinet Managing Director Automotive Advisory Services IHS Markit Dan Sceli President and CEO Peterson American Corporation Wes Smith President and CEO E & E Manufacturing Co., Inc. Armando Tamez CEO Nemak Jim Teets President and CEO ADAC Automotive James Verrier President and CEO BorgWarner Inc.

*Open to peer group council members and invited guests.

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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 members of the OESA Communications Team.

April Buford Senior Director, Communications

Jeff Laskowski Senior Manager, Communications

248.430.5964 abuford@oesa.org

248.430.5951 jlaskowski@oesa.org

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