OESA News 2018 3Q Edition 1

NEWS

Original Equipment Suppliers Association

2018 Third Quarter │ Edition 1

OESA Members-Only Toyota Town Hall Meeting | Register Today!

July 17

IN THIS ISSUE...

3 4 6

The Suppliers' Voice Supplier Pulse CTO Update

8 Guest Column 10 New Members 13 AASA Summit

14 OESA Events 16 Council Feature

This edition is sponsored by: 2018 Annual Conference | Nov. 7 OESA News - 2018 Third Quarter

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SAVE THE DATE

Register Now For The 2018 Annual Conference Transform. Innovate. Lead.

November 7, 2018 Suburban Collection Showplace Save the date, Wednesday, November 7th, 2018, for the 2018 OESA Annual Conference. It will be held at the Suburban Collection Showplace in Novi, Mich.

The event celebrates OESA's 20-year anniversary and will inspire the automotive supplier industry to transform its culture and innovate its products and services to lead in the new mobility industry.

Sponsorship opportunities and exhibit booths are available.

Contact Drew Rhodes at 248.430.5961 or drhodes@oesa.org.

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Voice

The Suppliers’

Ensure Your Voice Is Heard By Washington, D.C.

The motor vehicle industry is in the midst of trade issues that are creating an unprecedented level of business uncertainty – especially for vehicle suppliers.

These issues include: • • • •

Julie A. Fream

President and CEO "The MEMA advocacy team is working to address these issues with lawmakers in Washington, D.C., but law makers also need to hear from companies"

North American Free Trade Agreement (NAFTA) renegotiations Section 232 tariffs on imported steel and aluminum Section 301 tariffs on Chinese imports And most recently announced, the Section 232 investigation on imported automobiles and automotive parts.

For suppliers, the consequences of these actions will have a cumulative economic impact. Many suppliers are already coping with increases in material costs along with an inhibited ability to plan for future production. More importantly, further investments, innovation, and job growth in the United States will be suppressed.

The MEMA advocacy team is working to address these issues with lawmakers in Washington, D.C., but law makers also need to hear directly from companies. Elected officials are eager to understand how their constituents are affected by Washington, D.C. policies.

The upcoming congressional recesses are a perfect opportunity for suppliers with U.S. operations to connect with your elected representatives on issues that are important to your organization.

The 4th of July recess for both the House of Representatives and the Senate is July 2 - July 6. The August District Work Periods are scheduled for the House of Representatives for July 27 - September 4 and the Senate from August 6 - August 13 (dates are subject to change). During this time, member companies are encouraged to: • • •

Invite your members of Congress to your manufacturing or engineering facilities. Showcase your company and its impact on the local economy and community.

Schedule meetings with your members of Congress. Personal meetings are valuable opportunities to establish and build a relationship with your elected officials. Talking points are available for members, please contact Briana Huxley for a copy.

Attend your local Congressional Representatives town hall meetings. Ask questions and share the concerns that are most important to your organization and the industry. Check your Senators' and House of Representative’s website for upcoming town halls.

For information on who your elected officials are, visit house.gov and senate.gov.

For more information or help in engaging with your members of Congress in district or in Washington, D.C., contact Briana Huxley at bhuxley@mema.org.

As always, please feel free to contact me at 248.430.5963 or jfream@oesa.org.

Sincerely, OESA News - 2018 Third Quarter

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SUPPLIER PULSE

Supplier Baramoter Reflects Resilient and Dynamic Supply Chain Mike Jackson Executive Director, Strategy and Research 248.430.5954 │ mjackson@oesa.org

Supplier optimism is holding firm at a healthy level across the automotive supply base, especially given the dynamic environment involving market factors, policy matters and geopolitical events in 2Q 2018. The OESA Automotive Supplier Barometer, a quarterly survey of automotive supplier executives in North America on their 12-month outlook, posted a positive reading of 53 for the second quarter of 2018.

The latest OESA Supplier Barometer Index (SBI) reading dipped four points from the 1Q 2018 score, albeit from a three-year high, in the aftermath of passage of the Trump administration’s tax reform plan. The latest 2Q 2018 index reading reflects sustained momentum and holds two points higher than 2Q 2017.

The themes of Capital Markets and Innovation are driving the second quarter 2018 Supplier Barometer survey results. Capital investments are slated to grow meaningfully in the next 12 months, with 53 percent of survey respondents affirming somewhat or significantly higher levels of investment over the next year. Moreover, supplier executives anticipate dramatically higher capital investments in product innovation, with 70 percent of respondents calling for somewhat or significantly higher levels of product innovation investment in the next year.

Supplier Barometer Index - Opinions reflect greater optimism for smaller companies that tend to be more regionally focused than larger companies, compared to prior quarter results. Product launches continue to drive new business, and a healthy market is paving the way for new opportunities as the industry adds new vehicles, advanced technologies, and additional hybrid and battery electric offerings.

Despite the modest decline to the SBI in 2Q due to policy uncertainty, sentiment is holding in positive territory due to strong economic fundamentals as well as balanced inventories and healthy production volumes. Concerns remain over supply chain risks, commodity prices and the impact of government policy such as Section 232 and Section 301 tariffs, as well as the fate of NAFTA negotiations, including material changes to rules of origin that would hurt competitiveness.

"Supplier executives anticipate dramatically higher capital investments in product innovation"

Capital Markets - New product launch activity is a key driver of capital investment, which is slated to jump 33 percent to 32 launch events in 2018. Light truck activity will account for 75 percent of regional launches in 2018, or 24 of the 32 planned launch events. Over the near-term, launch activity is forecast to average a period high of 36 events per year from 2018 to 2020. Moreover, vehicle output remains robust, as OESA’s Affiliate Forecast Matrix reflects regional output of 17.2 million units in 2018.

Innovation - According to 70 percent of supplier executive respondents, product innovation is expected to drive somewhat or significantly higher capital investments. Based on the latest survey results, 20 percent of respondents anticipate double digit increases in capital spending in 2018. Open Innovation is a key trend that is transforming the processes and scope of supplier innovation by leveraging internal and external expertise.

Current capital strategies support open innovation, with 34 percent of respondents indicating support for a high or very high level of open innovation while more then 71 percent of respondents reflect a moderate to very high level of such support.

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SUPPLIER PULSE The automotive industry is poised to achieve another remarkably strong year, underscored by the fact that for the first time ever, North American vehicle production is forecast to surpass 17.0 million units for the fifth consecutive year. Such a sustained period of robust output provides a unique opportunity to prepare for the future by evaluating supplier strategies to fund future innovation.

Suppliers need to be well positioned to compete in today’s already dynamic global environment while also preparing to capitalize on emerging opportunities. In many cases, this will involve new technologies, processes and business models. To this end, 48 percent of supplier respondents anticipate higher capital investments allocated to mergers and acquisition activity over the next year. Additionally, 71 percent of suppliers indicate their capital planning process helps them achieve their innovation objectives by leveraging external partners to accelerate innovation and learning.

Findings from this survey, to be released 2Q 2018, plus all of OESA's past Automotive Supplier Barometers can be found at https://www.oesa.org/resource/oesa-automotive-barometer-studies.

"Suppliers need to be well positioned to compete in today’s already dynamic global environment."

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 quarterly 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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CTO UPDATE

Current Perspectives on Advanced Vehicle Technology Brian Daugherty Chief Technology Officer - MEMA 248.430.5966 │ bdaugherty@mema.org

The pace of technology change within our industry continues to amaze most observers and several recent announcements show that this fast pace continues. We have recently seen some interesting developments.

V2V - The U.S. vehicle industry has been waiting one and a half years for NHTSA’s final rulemaking regarding Vehicle-to-Vehicle communications (V2V), but due to heavy lobbying to share the same 5.9 GHz frequency spectrum, it remains unreleased. V2V is also known as Dedicated Short Range Communications or DSRC. Toyota’s recent announcement that they will begin equipping all of their vehicles with V2V equipment in the U.S. starting in 2021 is a great step forward in the industry’s effort to reduce fatalities. It has also resulted in some drama. Interestingly, two FCC commissioners were seemingly against this move – even though the 5.9 GHz spectrum is reserved strictly for vehicle safety use – and sent an unusual letter to Toyota warning them that this might not be wise. Toyota responded with another letter explaining that "MEMA believes – as does in the interests of vehicle safety it was necessary: “We are comfortable NHTSA – that this technology with our decision to commit capital expenditures to DSRC technology because we are confident that the Commission will implement a sharing offers significant safety benefits as both new and aftermarket mechanism only if that testing fully validates that unlicensed operation equipment for heavy and light can safely occur in the band, and not disrupt the current or further vehicles." deployment of this important safety technology by existing licensees.”

GM is currently selling a version of the Cadillac CTS sedan with V2V technology as well, but in limited quantities. Hopefully, if additional OEMs join Toyota in rolling out this technology across their fleets, we can effectively jump start the roll-out of V2V technology in the U.S. MEMA believes – as does NHTSA – that this technology offers significant safety benefits as both new and aftermarket equipment for heavy and light vehicles.

AV - The speed at which automated vehicle (AV) technology has sparked the interest of the world media and consumers continues unabated. However, several recent fatal accidents have increased the debate over the pace of development and whether current test protocols adequately protect pedestrians and other vehicles during public road testing. On March 18, an Uber automated test vehicle (SAE Level 4) operating with a safety driver struck and killed a pedestrian. This resulted in Arizona banning Uber from testing in the state. In addition, multiple fatal accidents involving the driver assisting Tesla Autopilot system (SAE Level 2) have occurred. The recent accidents point out the difficulties in having human drivers as back"The speed at which up. In a Level 2 vehicle, the driver is required to stay engaged continuously, automated vehicle (AV) but the danger of distraction is ever present - especially when the system technology has sparked has performed well previously in similar conditions. Even with a much more the interest of the world capable Level 4 test vehicle, the safety driver must remain alert at all times media and consumers during testing. These accidents are currently under investigation by NHTSA continues unabated." and/or the NTSB and are shaping the perception of AV technology by the public as well as legislators and regulators.

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CTO UPDATE BEV AND CAFE - OEMs have announced over $90B in investments worldwide for Battery Electric Vehicles (BEVs). Battery costs continue to decrease, but recent spikes in raw material prices for both lithium and cobalt threaten that trend. At current battery prices, BEV sales are driven primarily by government mandates – especially California’s Zero Emission Vehicle (ZEV) mandate in the U.S. Another factor driving OEMs to produce BEVs is that they are each counted twice under current Corporate Average Fuel Economy (CAFE) rules when calculating an OEM’s fleet average fuel economy. Thus, each BEV sale can help an OEM meet the California and follow-on states ZEV mandate as well as dramatically improving their CAFE calculations. BEVs, however, currently make up less than one percent of vehicle sales in the U.S. and it will be interesting to see if the announced investments pay off and result in increased consumer demand or will they continue to remain regulation “compliance vehicles.” The blue line on the accompanying chart below from IHS Markit forecasts slow, steady growth for BEVs rather than a rapid technology S-curve style adoption rate.

Fuel economy regulations in general are in flux in the U.S. as the government considers modifying the proposed MY22 to MY25 NHTSA CAFE and EPA Green House Gas (GHG) standards. A series of proposals regarding this change is expected very soon which will be followed by a public comment period.

ADAS - Advanced Driver Assistance Systems (ADAS) are becoming much more prevalent on North American vehicles and are clearly becoming a differentiator among OEMs. The percentage of new vehicles equipped with Automatic Emergency Braking (AEB) is rising dramatically as we move closer to the commitment dates established in the Memorandum of Understanding negotiated by NHTSA, the Insurance Institute for Highway Safety (IIHS), and 20 OEMs to put this safety technology on all light vehicles sold in the U.S. We are also seeing a dramatic increase in the number of heavy truck fleets equipping their new vehicles with fully integrated ADAS systems.

It continues to be an exciting time to be a vehicle supplier. While there is significant uncertainty in a number of areas, the pace of technology change has never been greater. Suppliers that take advantage of the resulting increase in technology spending will continue to see robust growth.

Chart and Data from IHS Markit

OESA News - 2018 Third Quarter

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GUEST COLUMN

Navigating Uncertainty: Legal Options for Manufacturers Confronting Tariffs Daniel J. Ferris and Derek R Boyd

Pursuant to a series of Proclamations issued by President Trump, tariffs recently went into effect on all steel and aluminum articles imported into the United States from countries other than Argentina, Australia, Brazil, and South Korea. Exemptions granted to Canada, Mexico, and European Union member countries expired on May 31. Negotiations addressing exemptions are ongoing, and the countries to which they apply may change over time. In addition, individual companies may also apply for exemptions. The authority for the tariffs is contained in the Trade Expansion Act of 1962, which empowers the executive branch to investigate the effect of imports on national security and to impose duties or other import restrictions on trade as a result. 19 U.S.C. § 1862.

The duties imposed by the tariffs are set at 25 percent for steel and 10 percent for aluminum. The affected articles include a wide variety of raw and semi-finished products, all of which are specifically identified in the Harmonized Tariff Schedule published by the U.S. International Trade Commission. They currently include iron and nonalloy steel ingots, semi-finished products, flat-rolled steel, bars, coils, angled sections, and wire, as well as unwrought aluminum and aluminum bars, rods, profiles, wires, plates, sheets, strips, foil (flat rolled products), tubes, pipes, tube and pipe fittings, castings, and forgings.

Anticipation of the tariffs was enough to contribute to increases in steel prices in the months leading up to the official announcement, and the last-minute exemptions issued to a number of impacted countries, as well as the view that the tariffs are being used as leverage in negotiations relating to U.S. trade agreements, has contributed to widespread uncertainty about the precise effect the tariffs will have on prices over time. At a minimum, however, the tariffs will impact many companies involved in manufacturing, including the automotive industry, and could cause supply-chain disputes between manufacturers and suppliers of steel and aluminum components. Many companies are parties to long-term, fixed-price contracts for the supply of components, and such arrangements are directly impacted by significant fluctuations in raw material prices. Suppliers of steel and aluminum products may determine that these contracts are no longer profitable as written following an increase in the market price of steel and aluminum and may wish to renegotiate contract prices as a result.

Legal Options in Light of Increased Raw Material Costs and the Implications for Manufacturing Contracts When negotiations fail, supplier cost increases may lead to litigation. The complex nature of the contracts involved in such cases can lead to unpredictable outcomes. When a supplier threatens to stop shipment due to rising costs that make existing contract prices a losing proposition, the first legal option is often a request by the purchaser for a temporary restraining order and/or preliminary injunction from a court. The goal of such an approach is to maintain the status quo while the litigation is pending, which can be critical when a supplier’s products are necessary to keep assembly lines running. Such injunctions are often sought and granted emergently and can force the supplier to operate at a loss on a particular contract while the parties and the court resolve the underlying dispute. Conversely, courts will sometimes order a supplier to keep supplying parts, but only if the buyer pays increased prices until the case is resolved. A court’s decision to grant an injunction is discretionary and is only a temporary solution pending a final decision. Still, this initial decision can be of monumental importance and can help to drive a settlement one way or the other.

Unfortunately for hard-hit suppliers, the outcome in such cases is frequently enforcement of the original contract terms. In extreme cases, a party may be able to avoid its obligations under the contract due to the 8 │ OESA News - 2018 Third Quarter

GUEST COLUMN impossibility of performance, but American courts almost never excuse a supplier’s performance on this ground simply because a raw material price increase has made the contract unprofitable. After all, while a supplier may lose money as result of the price increase, it is not “impossible” for it to continue to perform.

An aggrieved supplier may also look to “hardship” or “force majeure” provisions. These provisions are found in many contracts and excuse performance for “acts of God” such as natural disasters or other enumerated exceptional circumstances. The application of a particular provision would depend on its specific terms, but courts in the U.S. rarely find that such provisions are a basis on which to excuse performance unless a party is actually unable to perform its contractual obligations due to events outside its control. As noted above, however, the tariffs do not literally prevent a supplier from performing. Likewise, contract reformation is generally unavailable in the context of a raw material price increase. Typically, reformation is only available where the contract does not reflect the parties’ intentions due to mistake or fraud. A change in circumstances, such as a material price increase, could have been anticipated by the parties and would generally be considered insufficient by an American court.

While the tariffs only apply to goods imported to the United States, they affect suppliers based abroad that export steel or aluminum. American companies doing business abroad should be aware that other legal systems, in particular those based on a civil code, may be more receptive to arguments relating to hardship or unforeseen circumstances. As such, where contracts involve parties operating in certain foreign jurisdictions, remedies to compensate parties for increasing material costs are more likely to be available.

A severely-impacted supplier may resort to contemplating bankruptcy to avoid operating at a loss. Indeed, the threat of bankruptcy may offer some leverage to negotiate a price adjustment. Although bankruptcy is a more lenient and widely-used remedy for financially-distressed companies in the United States than it may be in other jurisdictions, it necessarily has far-reaching and unpredictable consequences and is almost always a measure of last resort.

One Approach to Dealing with Price Uncertainty: Price Fluctuation Agreements It may be beneficial for parties to try to avoid disputes stemming from material price increases caused by tariffs and other factors by addressing price increases prospectively. One option is for the parties to utilize a raw material price fluctuation agreement. Such agreements allow the component price paid by a manufacturer to adjust periodically based on changing market prices for raw materials. These agreements typically tie the price for raw material components to a given published index, which will depend on the commodity involved. This built-in adjustment mechanism allows the parties to automatically adjust the final price paid for goods based on changes in raw material costs.

Specifically, the commodity indices that provide pricing information for the articles affected by the recent steel and aluminum tariffs typically provide a snapshot of the real-time prices paid by a selection of purchasers.

Whether or not a particular index will accurately reflect the material price increase experienced by a particular supplier may depend on the composition of the pricing samples in the index and the extent to which they reflect national versus international prices. While they may not perfectly account for price increases experienced by specific suppliers, including those resulting from tariffs, price fluctuation agreements are a powerful tool that can help parties reduce the risk of a sudden supply chain disruption and litigation. In addition to helping avoid disputes stemming from tariffs, price fluctuation agreements also serve to avoid disputes following price changes caused by other destabilizing events. Parties may include language addressing price fluctuation in a manufacturing contract or they may subsequently enter into a price fluctuation agreement.

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OESA MEMBERSHIP

WELCOME NEW MEMBERS Dorman Products, Inc. 3400 E Walnut Street Colmar, PA 18915-9768 (267) 577-0504 www.DormanProducts.com Member Representative: Kevin Dunleavy - Director Dorman Products, Inc. is a leading supplier of exclusive automotive and heavy-duty replacement parts, hardware, brake parts and fasteners to the automotive and heavy vehicle channels. Dorman introduces thousands of new parts each year; and distinguishes itself as an innovative high quality manufacturer. As a Tier 1 supplier, Dorman delivers solutions to counter cost increases, retooling costs, and discontinued electrical components associated with aging product lifecycles. Additionally, Dorman consistently provides cost reduction opportunities for customer product portfolios.

FACTON 101 West Big Beaver Rd. 14th Floor Troy, MI 48084 (248) 687-1120 www.facton.com/en Member Representative: Michael Betz - Chief Operating Officer Alternate Representative: Ruediger Stern - President The FACTON EPC Suite is the leading Enterprise Product Costing (EPC) solution for the automotive, aerospace, mechanical engineering and electronics industries. Its specific solutions offer robust answers to the requirements of executive management and individual departments within the enterprise. FACTON EPC enables standardized, enterprise-wide costing independent of location and department for maximum product cost transparency throughout every phase of the product lifecycle. Businesses accelerate their costing, achieve pinpoint cost accuracy and secure their profitability.

FACTON was founded in 1998 and has locations in Potsdam, Dresden, Stuttgart and Detroit. Hasso Plattner, founder and chairman of the supervisory board of SAP SE & Co. KG, has supported this innovative company since 2006. The international portfolio of customers includes Ford Motor Company, Henniges Automotive, DURA Automotive Systems, Airbus, Mahle Behr, MANN+HUMMEL, Porsche and other renowned manufacturers.

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OESA MEMBERSHIP

WELCOME NEW MEMBERS FGA Technologies 3250 W. Big Beaver Road, Suite 516 Troy, MI 48084 (248) 613-6368 www.fga-tech.com info@fga-tech.com Member Representative: Dan Engler - Executive Vice President, Sales and Operations Alternate Representative: William Li - President FGA provides custom precision machining and die casting components in a variety of industries including automotive, high-speed railway, industrial equipment and home appliance to customers worldwide. FGA Technologies has three factories in Japan and China, equipped with hundreds of CNC machines and staffed with more than 520 employees, 330 production line operators and 190 management staff give us incomparable capability and capacity.

Plasan Carbon Composites 3195 Wilson Drive NW Walker, MI 49534 Plasan Carbon Composites Wixom Development Center 47000 Liberty Drive Wixom, MI 48393 (248) 924-3811 www.plasancarbon.com Member Representative: Tricia Anne Ong - Business Development Manager Alternate Representative: Ronen Berger - Vice President of Business Development Plasan Carbon Composites has established itself as the leading supplier of carbon fiber mass reduction solutions to automotive OEMs. They are an engineering-driven Tier 1 supplier of cost-competitive, carbon fiber parts designed for mass reduction in low and mid-volume platforms. Plasan is introducing carbon fiber to mass production through aggressive research and development, proactive development of engineered solutions and automated manufacturing processes.

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OESA MEMBERSHIP

WELCOME NEW MEMBERS PTM Corporation 6560 Bethuy Road Fair Haven, MI 48023 (586) 752-2013 www.ptmcorporation.com Member Representative: Donna Russell-Kuhr - President Alternate Representative: Andrea Johnson - Assistant to the President PTM Corporation has been producing metal stampings since 1972. Their expertise and experience is wide ranging, to include detail part design, prototype, tool build and high volume production. PTM has produced billions of metal stampings for their clients. From small clips and fasteners to car roofs and mower decks, they’ve done it all. PTM metal stampings are found on an estimated 70-75 percent of all cars and light trucks on the road today. You may wonder why their clients trust them enough to put their metal stampings on such a huge percentage of their products. The answer is quite simple; they are really good at what they do! They understand any metal stamper can bang out parts for you. By allowing PTM to design, prototype, build and then produce your parts in production, they eliminate multiple vendors, cut unnecessary steps in your supply chain, and most importantly cheat time. Bundling services also allows them to maximize their internal cross functional relationships and provide you with a one stop source for cost saving solutions.

Slalom 660 Woodward Avenue, Suite 1975 Detroit, MI 48226 (313) 324-1650 https://www.slalom.com/ Member Representative: Seth Vogel - Client Service Partner Alternate Representative: Drew Mattison - Business Development Executive The world is changing fast. To keep pace, companies need to find new ways to disrupt the status quo, get to market faster, create experiences their customers love, and build operational muscle for sustainable results. Rising to those challenges demands a fresh approach to problem solving. That’s where Slalom comes in. They’re a purpose-driven consulting firm that helps companies solve business problems and build for the future, with solutions spanning business advisory, customer experience, technology, and analytic.

They’re a team of thinkers, makers, and doers that came from enterprises, consultancies, agencies, and startups — all attracted by the promise of loving work and life. Their teams are deeply connected and bring their shared experiences and insights across industries, disciplines, and markets to each and every engagement. Founded in 2001 and headquartered in Seattle, WA, Slalom has organically grown to nearly 4,500 employees.

They were named one of Fortune’s 100 Best Companies to Work For in 2017 and are regularly recognized by their employees as a best place to work. You can find us in 25 cities across the U.S., U.K., and Canada.

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AASA OESA SPECIAL SUMMIT

Experts to Examine Strategies for Servicing Tomorrow’s Vehicles and the OES Service Channel at AASA OES Special Summit Subject matter experts will address two important issues in the market shifts suppliers face in the OE Service (OES) segment at the Automotive Aftermarket Suppliers Association (AASA) OES Special Summit on Thursday, Aug. 23, in Dearborn, Mich.

Jeff Flood, manager, diagnostic strategy and methods, General Motors, will address changing service needs in his discussion, “Servicing Tomorrow’s Technology-Enabled Vehicles,” and Scott Arnold, executive vice president customer care and brand extensions, AutoNation, will explore “Emerging OE Dealer Parts and Service Growth Strategies.”

AASA introduced its examination of the OE service channel with its webinar on June 13, now available for download here. The webinar featured discussions with Tim Corcoran, ZF director, strategy and vision; Bob Stewart, General Motors manager of aftermarket service support and global brand protection; David Williams, DENSO director of automotive original equipment service group; and Paul McCarthy, AASA executive vice president.

The AASA OES Special Summit on Aug. 23 will take a deeper look at market shifts and issues suppliers face in the OES segment. Many AASA members sell to the independent aftermarket and to the OES channel, and AASA will hold the forum to address its supplier members’ questions about OES and identify opportunities.

AASA will open an ongoing industry dialogue at the Summit and spotlight automakers, original equipment (OE) dealers and aftermarket suppliers that are developing strategies to grow OES business.

Representatives from each of these stakeholder groups will explain how they have grown their market share through dealer parts and service departments as well as aftermarket outlets beyond the dealer. Presentations also will address OES market outlook, the OES channel’s unique requirements and emerging OE dealer strategies.

Additional confirmed speakers and presentations include: • “Unique Needs, Current Challenges and Future Requirements of OES Channel” – David Williams, director, OES Sales, marketing and strategic planning, DENSO Products and Services Americas, moderator; panelists Jon Palazzo, vice president and general manager, mechanical, OE Connection; Kaleb Silver, senior product manager, Hunter Engineering • “Automaker OES Channel Strategies: Growing Parts, Sales & Service in the Aftermarket” – John Hanighen, global aftermarket director, Ford Motor Co. • “Collision: Critical and Growing Element of OES Channels” – George Irving, senior manager – wholesale and collision centers, Toyota North America The Summit also will include commentary by AASA President and COO Bill Long and Paul McCarthy, AASA executive vice president The AASA OES Special Summit is set for 9:30 a.m. - 3 p.m. on Aug. 23 at the Ford Conference & Event Center, Dearborn, Mich.; and includes lunch. Discounted tickets to the Henry Ford Museum also will be available to attendees. More information, including registration and hotel accommodation links available here.

Ford Motor Co. is sponsoring this inaugural AASA event, which offers additional unique promotional opportunities; contact Ben Brucato at bbrucato@aasa.mema.org for details.

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OESA EVENTS

Autonomous Vehicles Are Coming: Is Your Costing Process Ready? - Webinar by FACTON | July 12 Autonomous vehicles and mobility services are impacting the auto industry at an incredible rate and the impact is projected to accelerate. What does this mean for a supplier’s bottom line? How will profitability be impacted? To better prepare for the impending supply chain and customer base changes, manufacturers must put disciplined operations around strategic costing and quoting in place.

OESA members are invited to join OESA and Mike Betz, chief operating officer, FACTON, on July 12, 2018, for a webinar featuring insight on: • • • •

How the shift toward autonomous, connected and electric mobility will impact financials - including profits - for automotive suppliers Best practices in costing and quoting in this emerging market Which internal processes will be challenged and disrupted by this industry shift The importance of preparing costing and quoting processes now

OESA members may register in the events section of http://www.oesa.org. For registration assistance and program information, contact OESA at 248.952.6401.

Exclusive Content Providor:

Toyota Town Hall | July 17 OESA invites members to attend an upcoming Toyota Town Hall Meeting with Robert Young, group vice president, purchasing, supplier engineering development and cost planning, Toyota Motor North America, Inc. (TMNA), on July 17, 2018, at the Toyota Supplier Center in Saline, Mich.

Young is responsible for overseeing all vehicle parts and materials procurement, supplier preparation and cost planning for TMNA. Following the formal presentation attendees will be able to ask questions of Young, Deb Schroeder, vice president of purchasing, Greg Laskey, vice president of purchasing, and a design executive to be named, in an interactive Q&A session moderated by OESA President and CEO, Julie A. Fream.

The formal meeting starts at 2 p.m. and will run to 3:30 p.m. From 3:30 – 4:30 p.m., networking opportunities with purchasing teams will be available with the following commodities: Executive Sponsors • Electronics • Exterior • Electrical • Powertrain • Body • Chassis/Drivetrain • Interior • Functional • Seats • Materials OESA members may register in the events section of http://www.oesa.org.

For registration assistance, contact OESA at 248.952.6401.

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Supporting Sponsor

OESA EVENTS

OESA MarComm Summit: Modern Methods for Telling Your Company Story | July 18 Automotive marketing and communications executives are invited to attend the 4th annual OESA MarComm Summit: Modern Methods for Telling Your Company Story. The event will be held on July 18, 2018, at the MSU Management Education Center in Troy, MI. As electrification, autonomy and mobility transform the automotive industry, suppliers must also evolve using the latest marketing tools and data, as well as reflect their brands to stay on pace with customers, employees and the public.

To continue to remain relevant in a crowded and advancing industry, automotive marketers must stay tuned to the ever-changing landscape, George Boulos, marketing manager, roundtable6, will share insights on the latest industry marketing trends, how customers and marketers are changing and benchmark examples of how your brand can plan for success.

Derek DeVries, digital strategist, and Salim Bourget, director of creative and digital services, Lambert, Edwards & Associates, will discuss the latest digital marketing tools and strategies including optimizing digital assets, shifting your social media engagement strategy and strategic storytelling.

Damon Henry, founder, and Chris Rowell, president, KORTX, will share how to better manage customer data while simultaneously delivering personalized marketing experiences to customers that make an impact on your organization.

Ernie Perich, owner and creative director, Perich Advertising + Design, and author, 0to60Branding.com, will share case studies on updating supplier brand strategy to reflect the contemporary state of the industry.

Following the presentations, presenters will participate in an interactive panel Q&A session.

OESA members and guests may register in the events section at http://www.oesa.org. For registration assistance and program information, contact OESA at 248.952.6401

Tariffs Revisited: Supplier Pain Points | July 24 New rules on trade and tariffs are impacting suppliers in unprecedented ways. On July 24, 2018, OESA, Butzel Long and the Motor & Equipment Manufacturers Association (MEMA) will host an executive breakfast briefing at the MSU Management Education Center in Troy, MI, and via webinar to discuss the latest trade and tariff information, impacts on the automotive supplier industry and best practices.

The event, “Tariffs Revisited: Supplier Pain Points,” features speakers addressing the issue from three unique perspectives including; The Washington Perspective, with Ann Wilson, Senior Vice President, Government Affairs, Motor & Equipment Manufacturers Association (MEMA), The Legal Perspective, with Catherine Karol, Counsel, Detroit Office, Butzel Long , and The Supplier Perspective, with Julie A. Fream, President and CEO, OESA Exclusive Sponsor: In addition, speakers will address timing, what is included and what is not, as well as procedures and actions suppliers can take. A Q&A session with all speakers will follow the formal presentations.

OESA members may register in the events section at http://www.oesa.org. For registration assistance and program information, contact OESA at 248.952.6401.

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COUNCIL FEATURE 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 Officer Steve Handschuh President and CEO Motor & Equipment Manufacturers Association

Young Leadership Council (YLC7) 2018-2020 Supplier Testimonials, About the Program and Join Form OESA is seeking nominations for the seventh Young Leadership Council (YLC7). This council is open to all member companies and provides a forum to help develop and retain future leaders. Participants come from all functional area including finance, sales, marketing, manufacturing, human resources, purchasing, logistics, communications or “The access to industry leaders engineering. and speakers providing insight into leadership and critical issues During the 2-year program, council was very eye opening and not members hear from subject matter available anywhere else.” experts on leadership, personal YLC Alum development and industry topics and

trends. Designed as a peer-to-peer environment, attendees share best practices and experiences. Graduates leave the program better prepared for increased responsibility and equipped for the next step in their career with the member company.

Executives can nominate candidates for the Young Leadership Council by completing the nomination form located online at https://form.jotform.com/bmccann/YLC. The first meeting of the YLC7 will take place on October 11, 2018, at the OESA Conference Center in Southfield. Early nominations are encouraged.

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 David C. Dauch Chairman and CEO American Axle & Manufacturing, Inc. (AAM) Jacqui Dedo Co-Founder Aware Mobility, LLC Paul Doyle CEO Coastal Automotive (Continued on page 17)

“The lessons learned during the YLC stay with me to this day and I am significantly grateful for having the opportunity to serve on the Council.”

- YLC Alum

“Having successful leaders explain their philosophies will help the YLC members become better leaders themselves, thus improving the overall industry, one YLC class at a time.”

- YLC Alum

“I fully endorse the OESA YLC activity as a learning opportunity that should not be missed by anyone that wants to gain insight into relevant topics that leaders are facing today and access to their industry peers and leaders.”

- YLC Alum

For more information on the OESA Young Leadership Council, contact Keiyania Mann at 248.430.5952 or kmann@oesa.org.

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CALENDAR OF EVENTS

2018 UPCOMING EVENTS July

12 June July

17 6 July

18 July

24

Autonomous Vehicles Are Coming: Is Your Costing Process Ready? Webinar by FACTON Webinar Toyota Town Hall Meeting - OESA Members-Only Toyota Supplier Center Saline, MI MarComm Summit: Modern Methods for Telling Your Company Story MSU Management Education Center Troy, MI Tariffs Revisited: Supplier Pain Points MSU Management Education Center and via Webinar Troy, MI

Upcoming OEM Town Hall Meetings Aug 20

FCA Town Hall Novi, MI

Sept 13

Volkswagen Town Hall Novi, MI

Sept 18

Honda Town Hall Livonia, MI

Oct 2 Nov 30

Nissan Town Hall Livonia, MI Ford Town Hall Dearborn, MI

UPCOMING OESA COUNCIL MEETINGS* July

10 July

18

Legal Issues Council OESA Conference Center Southfield, MI Joint OESA Communication Executives and Automotive Public Relations Council Meeting MSU Management Education Center Troy, MI

July

Human Resources Council OESA Conference Center Southfield, MI

Aug

Enviromental & Health Safety Council Laurel Manor Livonia, MI

Aug

Chief Purchasing Officers Council MSU Management Education Center Troy, MI

26 7 9

OESA Board of Directors

(Continued from page 16)

John Dunn President and CEO, The Americas Plastic Omnium Auto Inergy Division Douglas J. Grimm Immediate Past Chairman of the Board, MEMA 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 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

Abby Napier Communications Specialist

248.430.5964 abuford@oesa.org

248.430.5951 jlaskowski@oesa.org

248.430-5957 anapier@oesa.org

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