OESA News 2020 - First Quarter - Edition 1

NEWS Original Equipment Suppliers Association

2020 First Quarter │ Edition 1

GM Purchasing/Supply Chain Town Hall | February 5, 2020

IN THIS ISSUE...

1 2 3 5

The Suppliers' Voice MEMA News Supplier Barometer RSM Supplier Barometer Commentary

7 Guest Column: Life Cycle 9 OESA Events 11 Welcome New Members

13 OESA Council Highlight 14 OESA Event Calendar

Voice

The Suppliers’ A Look Ahead…

Happy New Year! As the new year begins, OESA continues to champion the business interests of the supplier community and work to provide even greater value to members.

In 2020, OESA will focus on four strategic initiatives: CONNECT Fostering strong relationships throughout the supply chain is a core strategy for OESA. In 2020, OESA will continue to strengthen OEM-supplier and suppliersupplier relations while building stronger bonds with industry entrants. OEM Town Halls will go beyond purchasing and engineering to feature other OEM functions, such as vehicle design and manufacturing. Additionally, the “OESA Industry Disruptor Series” – which recently presented Rivian, Canoo and Karma – will feature both OE and supplier organizations that are changing the industry’s landscape.

ENGAGE With more than 800 supplier executives engaged in the OESA Peer Group Councils, OESA council activity is a valuable asset for many members. OESA's goal for 2020 is to grow council membership and attendance by continuing to provide relevant speakers and insight. This year we are launching the “OESA Master Class Series” to support the engagement and development of the next generation of supplier executives.

INSIGHT OESA continues to educate and advocate on legislative and regulatory issues impacting the supplier community. Together with the MEMA team in Washington, D.C., we will feature new events and webinars on tariffs and trade, including USMCA. Other initiatives include more web-content and podcasts on industry trends and strategic insights.

COMMUNICATE OESA continues to evaluate new ways to communicate information. The OESA Engagement App, now in beta testing, puts the power and value of OESA membership on mobile devices. In 2020 OESA will also expand into new social media channels to broaden communication with members.

These are just a few examples of how OESA will deliver greater membership value in 2020. OESA is proud to be the voice of automotive suppliers.

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

Julie A. Fream President and CEO OESA

If your organization is interested in being featured in the “OESA Industry Disruptor Series.” contact April Buford at abuford@oesa.org or 248.430.5964.

OESA will highlight organizations that are delivering “what’s next” in automotive.

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MEMA NEWS

OESA/MEMA Congratulate House and USTR for Reaching USMCA Deal OESA and MEMA are pleased with the work in the House and USTR required to reach an important deal to finalize the United States-Mexico-Canada Agreement (USMCA). The agreement opens the door to passage of the USMCA, which will help ensure that U.S. businesses stay competitive in the global marketplace.

We still need to learn the details of the plan. Absent any concerns with the actual language, OESA and MEMA call for quick consideration of the USMCA and a positive vote in 2019.

The USMCA will provide economic certainty and opportunity for manufacturing growth in the United States and throughout the region. This economic certainty is essential to preserve and enhance vital North American supply chains for the U.S. automotive sector. That, in turn, will allow U.S. suppliers to be competitive in the global mobility marketplace.

A new North American Trade deal for the 21st Century is essential to U.S. economic success now and in the future, and we are pleased with the progress.

Watch for information in the coming weeks regarding events to help suppliers better understand the impact of the USMCA. Please feel free to contact the MEMA Government Affairs team in Washington, D.C. for assistance.

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Ann Wilson, Senior Vice President, Government Affairs - 202.312.9246 | awilson@mema.org

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Bill Frymoyer, Vice President, Public Policy - 202.312.9253 | bfrymoyer@mema.org

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Catherine Boland, Vice President, Legislative Affairs - 202.312.9241 | cboland@mema.org

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Leigh Merino, Vice President, Regulatory Affairs - 202.312.9249 | lmerino@mema.org

OESA News - 2019 Fourth Quarter

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OESA SUPPLIER BAROMETER

Protracted Uncertainty Continues to Weigh Down Sentiment Mike Jackson Executive Director, Strategy and Research 248.430.5954 │ mjackson@oesa.org

According to the Q4 2019 OESA Automotive Supplier Barometer Index (SBI) – a gauge to measure the sentiments of North American automotive supplier executives – supplier pessimism continues to weigh upon the automotive supply base. Results posted a negative reading of 37 for the period; 13 points below a neutral reading of 50. The Q4 2019 index marks the sixth straight quarter of net pessimism and is two points lower than a year ago.

Despite uncertainty, leading suppliers recognize the need to proactively engage employees and communities, to attract, retain and develop workplace talent. This equally true for college educated employees as for skilled trade team members on the shop floor in today’s tight talent market. Executive teams are promoting dialogue and embracing feedback to demonstrate flexibility, align company culture and reskill where appropriate. Leading organizations of all sizes are expanding efforts to foster skill development and strengthen career planning.

The high degree of pessimism is attributed to ongoing trade tensions, volume declines, and the recent United Auto Workers (UAW) strike at General Motors. Survey sampling was conducted in late October while the UAW strike at General Motors was still in process. Pessimism was shared across suppliers of all revenue sizes but the larger, more globally-exposed suppliers were more pessimistic in comparison.

The Q4 2019 OESA Supplier Barometer, sponsored by RSM US LLP, focused on HR and Talent.

The results indicate: • Trade policy remains the greatest industry threat to automotive suppliers, however there were substantial increases in volume risk and weakness in the U.S. economy.

• Regional voluntary turnover rates are extremely high throughout North America, and the availability of skilled workers remains scarce. Firms are focusing on internal development to cope with staffing issues.

• The industry is striving to attract younger workers with greater emphasis on schedule flexibility and cross-functional job rotation.

• Organizational leadership, communication and empowerment are the top HR priorities heading into 2020.

Suppliers are developing future leaders internally through mentorship and cross-functional job rotation programs.

Click here to view the Q4 SBI Chart and the full copy of the Supplier Barometer results.

Commentary from RSM US LLP on the Q4 2019 OESA Supplier Barometer results can be found on page 5.

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 quarterly survey 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 supplier industry trends.

Contact Mike Jackson to learn more about the quarterly Automotive Supplier Barometer. He can also provide information on economic and industry trends and the CFO and CPO Councils.

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OESA SUPPLIER BAROMETER OESA Supplier Barometer: Q4 2019 Results Describe the general twelve-month outlook for your business. Over the past three months, has your opinion become‌?

Current Supplier Outlook (Share of Respondents) Q3 2019

60%

US Tax Reform

70 60

40%

50

20%

Lehman Collapse

37

40

Jan-2019

Jan-2018

Jan-2017

Jan-2016

Jan-2015

US Fiscal Cliff

Jan-2014

Jan-2013

Jan-2012

Japan Tsunami/ Grexit Crisis

Jan-2011

Jan-2009

Significantly more pessimistic

Somewhat more pessimistic

Unchanged

Somewhat more optimistic

20

Jan-2010

Euro Crisis Begins

30 Significantly more optimistic

0%

Supplier Barometer Index: (SBI and 6m Average) 80

Q4 2019

227 responses

SBI Score = 37; from Q3,4remaining deep on SBIunchanged Score = 53; drops points from the in Q1negative level of territory 57 continued tradesupports tensions,optimism poor sales of programs thedrive UAWpessimism strike at GM Tax reform while trade and supplied decliningand sales 1

Q4 2019 OESA AUTOMOTIVE SUPPLIER BAROMETER

OESA Supplier Barometer: Roles/Responsibilities vs. Skills - Understanding the Gaps How do you see this changing over the next 1 to 3 years?

What are you doing to adapt your organization to each of these changes?

Increased Training / Skills Development / Re-skilling

28

Reorganization

Narrowing Gap 54 33%

Widening gap 64 39%

10

College Recruitment / Co-ops / Internships / Grade School Engagement

6 5

Change in Hiring Practices

5

Evaluation and Monitoring 3

No Specific Plan No Change 47 28%

Increased Flexibility

2

Increased Communication

2

Plan in Process

2 5

Other

Number of Responses

Adaptation and reorganization be necessary to the cope SBI Score = 53;will drops 4 points from Q1with levelcurrent of 57 and emerging skills training and while new hiring practices aresales expected to realize gains.

Taxgaps, reformwhere supports optimism trade and declining drive pessimism 2

Q4 2019 OESA AUTOMOTIVE SUPPLIER BAROMETER

OESA Supplier Barometer: Programs to Attract and Retain Talent How do you see this changing over the next 1 to 3 years?

New Recruiting Initiatives

Fewer Programs 11 7%

More Programs 98 60%

What are you doing to adapt your organization to each of these changes?

No Change 54 33%

19

Incresed Benefits

12

Increased Flexibility

12

Evaluating Policies

12

Talent / Employee Development / Training

11

Increased Engagement

7

Change in Company Culture

6

No Specific Program

5

Increased Funding Decreased Recruitment Efforts

4 1

Number of Responses

In addition to traditionally increasing compensation andthe benefits, many SBI Score = 53; drops 4 points from Q1 level of 57firms have increased training, perks, development, and communication employees.

Tax reform supports optimism engagement while trade and declining sales drivewith pessimism Q4 2019 OESA AUTOMOTIVE SUPPLIER BAROMETER

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OESA News - 2019 Fourth Quarter

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GUEST COLUMN

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OESA News - 2019 Fourth Quarter

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GUEST COLUMN

Your Environment, Health, & Safety Program Tech Improvements for 2020

By Brianne Ray, LyfeCycle

Q: In today’s age, why should an EH&S program matter to manufacturers?

A: EHS is far more than just meeting compliance and checking boxes. Rather, the critical heartbeat of keeping an organization safe for its employees, compliant, and focused on environmental loyalty. Environment, health and safety is an organizational discipline that implements specific aspects of environmental protection and safety at work. In simple terms, EH&S is what organizations must do to ensure that their activities do not cause harm. From a health & safety standpoint, it involves creating standardized procedures to identify workplace hazards while reducing accidents and exposure to harmful situations and substances.

Q: Is the traditional way of managing an EH&S program still effective for a modern-day manufacturer? Why or why not?

A: Spreadsheets, binders, and paper forms are a thing of the past. Intelligent analysis of EH&S, Corrective Action/Risk Mitigation, Environmental Impact Reduction, Universal Corporate Perspective, and Scalability are critical elements in today’s EH&S world! A modern EHS program promotes goal setting, metrics, data detail, and corrective action in an easily accessible way, in order to progressively improve and manage EH&S day to day.

Q: What kinds of manufacturing organizations can successfully implement a technology based solution to raise their EH&S program to the next level?

A: No matter the type of manufacturer, size, or headcount; an EH&S program guided by a technical solution is critical to the overall “health” at an organization. Sophistication, intelligence, and ease of use promotes a vested interest in continuous improvement of employee well-being and environmental impact.

Q: How can LyfeCycle’s service offerings boost the success of a manufacturer’s existing EH&S program?

A: Understanding what your organization does well within EH&S, where it needs improvement, how dollars are affected, and how environment is impacted by your organization is what matters in today’s manufacturing world. LyfeCycle was created specifically with the manufacturer in mind, with custom functionality that gears exactly toward what matters in managing a successful program. The ability to generate actionable data to be used for improvement and understanding is what LyfeCycle was built for. LyfeCycle creates an experience that is user friendly, actionable, customizable, and undeniably a “next level way” to manage EH&S!

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Q: What questions should a manufacturer be asking to determine if their EH&S program is ahead of the curve or behind the pack?

A: We live in a technology guided world that enhances the way we think, live, react, and improve what is all around us. Having the ability to automate an organization's EHS program in a way that creates actionable data that can be utilized in multiple forms and for multiple reasons is how a manufacturer should be viewing EH&S. Doing things the same old manual way from decades past with a reactive mentality, only prevents what pivotal information could be right at the fingertips to keep employees safer, save money, set goals, improve customer reputation, and become more organizationally intelligent!

Q: How do efficiently managed EH&S programs help a manufacturer’s need to balance economic success with responsible environmental and community stewardship?

A: EH&S is highly critical to multiple areas of an organization and to the community, which makes it quite unique! The commitment and quality to a well-nourished EH&S program affects the employees, the business itself in proving environmental responsibility and quality to its customers and community, and the longevity/sustainability of keeping an organization flourishing and successful. How a manufacturer is viewed from the outside world, makes for a positive reputation with the people involved (employees/customers) and the environment aspects it impacts such as water, greenhouse gas, and environmental reduction. The LyfeCycle technology guides this philosophy in a way that was BUILT for the manufacturer!

About the Author: Brianne Ray is responsible for strategy & client development for LyfeCycle. She may be reached at 248-830-7290 or Brianne.Ray@luxinteractive.com.

About the Company: Looking for more on EH&S solutions for your business? www.lyfecycle.net.

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OESA EVENTS Members-Only GM Purchasing/Supply Chain Town Hall / Feb. 5 OESA awill host the 15th annual OESA Members-Only General Motors Purchasing/Supply Chain Town Hall with Shilpan Amin, vice president, global purchasing & supply chain, General Motors, and members of his Global Purchasing & Supply Chain (GPSC) senior leadership team on Feb. 5, 2020, at the Marriott Detroit Renaissance Center, Detroit, Mich. Amin was named vice president, global purchasing & supply chain in October 2019.

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

OESA members who currently interface with GM or who wish to do so in the future should plan to attend this annual town hall meeting.

2019 GM Town Hall

Shilpan Amin Vice President, Global Purchasing & Supply Chain, GM

Networking Sponsor:

Executive Sponsors:

Supporting Sponosors:

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OESA EVENTS OESA/CAR 2020 The Mobility Web: Joining Forces to Build the Future / March 11 OESA and the Center for Automotive Research (CAR) have partnered to host the 1Q 2020 Mobility Supplier Forum titled, "The Mobility Web: Joining Forces to Build the Future," on March 11, 2020, at HPE Campus in San Jose, Calif. Auto industry experts, community leaders and start-up company executives will discuss how they are collaborating to build the future of the mobility.

Keynote speakers John Rich, chief operating officer, Ford AV, LLC, and Brett Roubinek, president & CEO, Transportation Research Center, will share their unique perspectives on the evolution of collaboration in the automotive industry.

Alex Thibault, vice president and general manager, North America, Vulog, will share his perspective on how partnership decisions are made and what companies have learned from these partnerships to date.

The "Smart City Mobility" Initiatives session will cover what technologies smart cities are deploying, the role of multimodal transportation, and outcomes municipalities are experiencing. Speakers include Jordan Davis, director, Smart Columbus, Columbus Partnership, Amanda Graor, chief innovation officer, Mid-America Regional Council, Alex Pazuchanics, mobility services manager, City of Seattle, and Karina Ricks, director of mobility and infrastructure, Greater Pittsburgh Area.

Differing clock speeds between automakers and technology companies make industry startup partnerships difficult, yet essential to move through the massive technology shift underway within the industry. A panel of leading automotive supplier and startup executives will explore how this process has played out for manufacturers and startups alike.

Panelists include: • • • • •

Jeff Davis, Senior Director, Connected Transportation, BlackBerry Jim Douglas, President and CEO, Wind River Todd Fletemier, Vice President, Midwest Technology Platform, Faurecia North America Ashok Sivanand, CEO, Integral Marc Smeyers, Chief Technology Officer, GHSP ​​

Automotive suppliers looking for insight into the latest in automotive technology and tech companies that are exploring entrance into the automotive industry are encouraged to attend these forums.

In Partnership With:

OESA members and industry guests may register in the events section of http://www.cargroup.org. For registration assistance, contact CAR at 734.662.1287 or info@cargroup.org.

OESA members and industry guests may register for events at www.oesa.org.

For registration assistance, contact OESA at 248.952.6401 or info@oesa.org.

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WELCOME NEW MEMBERS Dae Yong Industry Co.

Kostal Kontakt Systeme, Inc.

Member Representative: Matthew Kern, Business Development Manager

Member Representative: Holger Lettmann, President & CEO

2766 W. 11 Mile Rd, Suite 5 Berkley, MI, 48072, USA (248) 227-5511 www.daeyong.com

Dae Yong is a highly-reliable aluminum die casting company that produces automotive parts with superior precision, superior tensile strength, and mechanical characteristics. Dae Young uses high pressure and high speed aluminum die casting using precisely manufactured molds with in-house machining. It has three factories in South Korea and has established itself as a global company producing and supplying automotive parts all over the world.

1350 West Hamlin Rd. Rochester Hills, MI 48309 (248) 284-7639 www.kostal.com/kks

KOSTAL Kontakt Systeme is an independent company in the KOSTAL Group, a family company acting internationally and counting all the world's leading automobile manufacturers among its customers. The core business of KOSTAL Kontakt Systeme GmbH is the development, production and sale of plug connector systems for the automobile industry. KOSTAL Kontakt Systeme GmbH has a presence on three continents, with nine locations and 1400 employees.

Schuler Incorporated 7145 Commerce Blvd.

Canton, MI 48187 (734) 207-7200 www.schulergroup.com

Member Representative: Thomas Schmider, Director, Sales Schuler offers customized first-rate technology in all areas of forming – from the networked press-to-press shop planning. In addition to press, its products include automation and software solutions, dies, process know-how and service for the entire metalworking industry. Its customers include automotive manufacturers and suppliers, as well as companies in the forging, household appliance and electronics industries. When it comes to the digital transformation of the forming technology, it supports its customers worldwide as a supplier of innovative system solutions. Founded in 1839 with headquarters in Göppingen, Germany, Schuler AG has 6,600 employees at production sites in Europe, China and America, as well as service companies in more than 40 countries. The company is majorityowned by the Austrian ANDRITZ Group.

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WELCOME NEW MEMBERS Shindengen America, Inc. 2333 Waukegan Rd, Suite 250 Bonnockburn, IL 60015 Tel: (248) 463-0092 www.shindengen.com

Member Representative: Tim Holly, Business Development Manager Alternate Representative: Terry Shibata, President Shindengen is an advanced power electronics manufacturer combining three core technologies: semiconductors, power circuits, and module developments. Facing the revolution coming to modern mobility, it is dedicated to be on the forefront of this transition developing innovative technologies for the automotive industry worldwide.

Holding its mission as “maximizing energy conversion efficiency for the benefit of humanity and society”, it continues to protect the environment with its combined core technologies while responding to customer needs.

Shindengen partners can always count on competitive prices, short lead time, comprehensive production capacity and a broad variety in our product lineup: wireless charging systems, car electronics products including converters, inverters, power discrete devices and modules.

Sumitomo Electric Wiring Systems Inc. 1018 Ashley St. Bowling Green, KY 42104 Tel: (270) 782-7397 www.sewsus.com

Member Representative: Richard Whitaker, Vice President There is power in a trusted brand. Sumitomo Electric Wiring Systems, Inc. (SEWS), builds their reputation on this.

The Sumitomo family of companies is a 400-year-old brand synonymous with quality and reliability. Delivering innovative solutions for today's intelligent cars is what they all about - and for this reason, today Sumitomo Electirc Wiring Systems are a leading supplier of electrical distribution systems, components and electronics to the automotive industry. It is committed to producing the highest quality products, delivered on time and at a competitive cost in a safe and healthy environment. Sumitomo Electric Wiring Systems is a subsidary of Sumitomo Electric Industries, Ltd., a Fortune Global 500 Company.

Join OESA Today!

Become a member and let OESA champion your business interests throughout the supply chain and in Washington, D.C.

For membership information, contact: Steve Horaney Vice President, Membership and Sales 248.430.5969 shoraney@oesa.org OESA News - 2019 Fourth Quarter

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COUNCIL HIGHLIGHT

OESA Automotive Warranty Best Practices Automotive warranty management is an ever-evolving, complex world of big data, problem solving and risk mitigation for both automakers and suppliers. The challenges associated with warranty management are many and can often lead to unnecessary costs and a decrease in customer and end-user satisfaction.

The OESA Warranty Management Council has created a best practices document for managing claims and repair data throughout the warranty lifecycle. The document is a helpful tool to foster a more collaborative partnership between manufacturers and their component suppliers through the implementation and execution of a fair, robust and data-driven warranty process.

With a focus on maintaining end-customer satisfaction, the goal of the Automotive Warranty Best Practices is to provide a reference to track, monitor, and address field issues as they arise.

Click here to view the OESA Automotive Warranty Best Practices document.

If you are interested in getting involved in council member-driven special projects and a peer sharing group that shares best practices on warranty-related topics, this is a council to consider. The next meeting is March 26th and OESA invites guests to attend.

Click here to learn more about the OESA Warranty Council or contact Ginger Juncker, executive director, councils and member programs, at 248.430.5953 or gjuncker@oesa.org.

Automotive Warranty Management Best Practices

Presented by the OESA Warranty Management Council

oesa.org

Created in December 2019

Learn more about OESA Peer Group Councils at oesa.org. To determine eligibility requirements for councils and be a guest at a meeting, contact Ginger Juncker, Executive Director, Councils and Member Services, at gjuncker@oesa.org or via 248.430.5953.

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OESA EVENTS Upcoming OESA Events

Jan. 6 Feb. 5 Mar. 11

2020 Consumer Electronics Supplier Briefing MGM Grand, Las Vegas, NV

GM Purchasing/Supply Chain Town Hall

Marriott Detroit Renaissance Center, Detroit, MI

OESA/CAR 2020 The Mobility Web: Joining Forces to Build the Future HPE Campus, San Jose, CA

Upcoming Council Meetings:

Jan. 7

Young Leadership 7 Council

Jan. 16

Advanced Technology Council

Jan. 21

Legal Issues Council

Jan. 22

Young Leadership 8 Council

Jan. 23

Chief Purchasing Officer Council

Jan. 30

Enviroment Health, Safety & Sustainability & Human Resources Joint Council

OESA Conference Center, Southfield, MI OESA Conference Center, Southfield, MI OESA Conference Center, Southfield, MI OESA Conference Center, Southfield, MI OESA Conference Center, Southfield, MI OESA Conference Center, Southfield, MI

Upcoming 2020 OESA Town Hall Meetings Mark Your Calendar for the Members-Only OEM Town Hall Meetings

Feb. 5, 2020

GM Purchasing/Supply Chain Town Hall

May 5, 2020

VW Town Hall - Save the Date

Aug. 20, 2020

FCA Town Hall - Save the Date

Nov. 19, 2020

Nissan Town Hall - Save the Date

Marriott Detroit Renaissance Center, Detroit, MI TBD

Suburban Collection Showplace, Novi, MI TBD

OESA members and industry guests may register for events at www.oesa.org.

For registration assistance, contact OESA at 248.952.6401 or info@oesa.org.

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Original Equipment Suppliers Association 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 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