OESA News - Fourth Quarter - Edition One

NEWS Original Equipment Suppliers Association

2021 Fourth Quarter │ Edition 1

OESA and Harbour Results, Inc. Automotive Tooling Update October 14, 2021

IN THIS ISSUE...

1 Warner Legal Corner 2 On Your Behalf 3 Council Highlight - CPO Council

4 MEMA Advocacy 5 Automotive Supplier Conference 7 Innovation in the Industry

9 OESA Events 11 Welcome New Members 12 OESA Calendar of Events

Warner Legal Corner LEGAL TOPICS FOR THE AUTOMOTIVE INDUSTRY Volume Seven, October 2021

New Tactics Employers Are Taking to Encourage Employee Vaccinations Many employers have been in the news recently regarding their efforts to vaccinate their employees against COVID-19.

One tactic employers, including automotive suppliers, are using is to require employees who have not received the COVID-19 vaccine to pay more per month for their health insurance premiums. Employers can implement this type of incentive if the program is structured to comply with wellness program rules under the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA).

A premium surcharge for unvaccinated individuals will have to comply with the following HIPAA/ACA rules for healthcontingent wellness programs: A participant must be given the opportunity each year to qualify for the reward (i.e., avoid the surcharge).

The maximum reward for all health-contingent wellness programs (including the vaccine incentive) cannot be more than 30% of the total cost of the employee’s health coverage (both employee and employer contributions), though incentives tied to smoking can go up to 50% of the cost.

The program must be reasonably designed to improve health or prevent disease.

The program must meet uniform availability and reasonable alternative standards.

In addition to the HIPAA/ACA wellness program requirements, employers must also take into account how the following laws affect the vaccine incentive program: HIPAA privacy and security rules.

The Americans with Disabilities Act. Civil rights law, such as Title VII.

ERISA notification requirements.

State wage and hour laws.

For more information from Warner’s Automotive Industry Group, visit their webpage or log onto www.wnj.com.

Michael Brady

Partner mbrady@wnj.com 313.546.6032

Tom Manganello

ATTORNEY SPOTLIGHT

Stephanie Grant

Warner Senior Counsel Stephanie Grant counsels employers on employee benefits and ERISA – with an emphasis on health and welfare benefits, including COBRA, HIPAA and the Affordable Care Act as well as wellness programs nationwide. While she counsels companies across all industries, many of her clients operate in the automotive and manufacturing space. In fact, she has been working with automotive suppliers her entire legal career.

Stephanie enjoys collaborating with clients on the unique and complex issues facing automotive suppliers today.

Understanding their more sophisticated and competitive benefit packages in place to attract quality talent, Stephanie positions herself as a consultant, helping to create and manage customfit plans to reach those goals. Additionally, Stephanie helps suppliers navigate issues facing their unionized workforces. It’s this kind of insider knowledge and experience that her clients rely on time and again.

Stephanie explains: “I set out to understand the pressures they may be facing in their individual roles. Then I custom-fit a solution – explaining the risks, but offering alternatives that fit their specific industry, business needs and budget.”

Stephanie is active in the community, specifically with the Transgender Legal Defense and Education Fund’s Name Change Project in Michigan, where she works with area law firms to assist the transgender community in navigating the legal name change process. She is a sought-after speaker at events and webinars where she educates clients on the ever-evolving landscape of employee benefits law.

Checkout Stephanie’s full bio here.

Partner tmanganello@wnj.com 313.263.6855

Elaine Taylor

Business Development etaylor@wnj.com 586.876.4045

Click here to access Warner’s Legal Corner Resource Page on OESA’s website.

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On Your

Behalf

Proposed GHG Emissions Standards: A Direct Impact on the Supplier Community

The Environmental Protection Agency (EPA) recently proposed new greenhouse gas emissions (GHGs) standards on light vehicles for model years (MYs) 2023-2026.

Designed to replace the current Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule, the proposal further supports the Administration’s executive order on vehicle emissions.

It will have a significant impact on the automotive supplier community.

To summarize the proposed standards, it represents year-over-year light vehicle emission decreases of approximately 10% in MY2023 and 5% in MYs 2024-2026, with MY2026 being the most stringent emissions standards set to date.

The proposal also: • Extends advanced technology multiplier credits for BEVs, PHEVs, and FCEVs for MYs 2022 – 2025, and eliminates natural gas vehicle multiplier credits • Expands the off-cycle technologies credit program caps from 10 g/mile to 15 g/mile • Retains emissions credit averaging, banking and trading provisions which automakers have used since the inception of the current program MEMA – OESA’s advocacy team in Washington, D.C. – has taken the following positions with policy makers on Capitol Hill on behalf of supplier members regarding the pre-2027 emission standards: • We support performance-based standards that allow for a broad spectrum of advanced technologies and innovations, including advances in ICE and electrification (BEV, PHEV, and FCEV) technologies.

• We are committed to the shift towards electrification while still leveraging other American innovations that play a part in meeting the nation’s goals.

• We propose a coordinated approach between Enviromental Protection Agency (EPA), the National Highway Traffic Safety Administration (NHTSA) and the California Air Resources Board (CARB).

• We support expanding the off-cycle technology credit program and increasing credits caps; as well as the advanced technology multiplier credit as proposed.

For MY2027 and beyond, our goal is to continue to advocate for a broad spectrum of advanced technologies that utilize all supplier innovations and investments.

I invite you to stay informed about regulatory and legislative changes. Be sure a member of your team is on the MEMA Government Affairs Council (GAC) and sign up to receive text updates on the issues.

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

Julie A. Fream President and CEO OESA

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OESA PEER COUNCIL HIGHLIGHT

Introduction to the OESA Chief Purchasing Officer Council Mike Jackson Executive Director, Strategy and Research 248.430.5954 │ mjackson@oesa.org

The OESA CPO Council offers compelling insights and actionable content for senior purchasing executives of North American suppliers. This dynamic group enjoys the opportunity to engage with industry peers who are well versed with a range of tools to leverage opportunities while navigating pitfalls across global automotive supply chains. Members of this group include CPOs, presidents, directors and other senior purchasing executives of automotive suppliers. These leaders gather four times per year to gain valuable insights from thought leaders on specific topics to help them make better informed decisions and gather dynamic perspectives from trusted members of their extended professional network.

CPO council meetings include three key parts. Following a welcome to current members and guests, attendees join a brief breakout session to network and raise topics of common interest or concern to be discussed in the Roundtable session. Thereafter, members learn rich insights from subject matter experts on curated topics of interest established by the council’s Board of Governors.

Past presentations include updates on Managing Distressed Supplier Risks, Consumer Electronics Show (CES) Auto Technology Highlights, MRO Best Practices as well as Proactive Supplier Readiness Insights, IATF 16949: Key Supplier Priorities as well as Regulatory Policy Debrief on USMCA and Tariff Dynamics. The CPO Council also receives updates on the quarterly OESA Supplier Barometer.

After these insights, the meeting then shifts to the roundtable discussion, where members may seek feedback or ask questions, share experiences or provide valuable input from past lessons learned in a trusted environment. Council members benefit from the collective expertise of their council peers as a means to continually learn and improve to help save valuable time and critical resources.

To learn more about the OESA Chief Purchasing Officers Council please contact Mike Jackson at mjackson@oesa.org or Joe Zaciek at jzaciek@oesa.org.

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MEMA ADVOCACY

Urge Your Legislator to Act Now on Semiconductor Legislation Ann Wilson Senior Vice President, Government Affairs 202.312.9246 │ awilson@mema.org

The Senate recently passed the “Creating Helpful Incentives for the Production of Semiconductors (CHIPS) for America Act” which includes $52 billion in emergency funding to promote semiconductor manufacturing in the United States. That figure includes $2 billion to manufacture mature node chips that are used in the motor vehicle sector. As the industry already grapples with the challenges brought on by the COVID-19 pandemic, the House must act now to enact this legislation.

The shortage of chips is getting worse, underlining the need for quick passage of the CHIPS Act. For example, The Washington Post reports the global auto industry will produce four million fewer vehicles this year due to the semiconductor shortage, losing $110 billion in sales.

Click here to tell your Representative that Congress must act now on this legislation which strengthens semiconductor production in the United States. Simply use our one-click system to generate a letter to your Representative by entering your name and address.

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OESA AUTOMOTIVE SUPPLIER CONFERENCE

Register for the 23rd Annual Automotive Supplier Conference: Beyond Disruption. The day-long event will be held on Monday, Nov. 8, 2021, at the Suburban Collection Showplace in Novi, MI. This is a must-attend event for automotive OEM and supplier professionals to network in-person and hear from industry thought leaders on the future of automotive.

Confirmed presenters and panelists include:

Shilpan Amin General Motors

Carla Bailo Center for Automotive Research

Scott Bennett Lear

Patti Burquest RSM

Françoise Colpron Valeo North America

Brian Daugherty MEMA

Charlie Evans Federal Reserve Bank of Chicago

Julie A. Fream OESA

Fred Gordon RSM

Mark Gottfredson Bain & Company

Chuck Gray Ford Motor Company

Steve Horaney OESA

Mike Jackson OESA

Monica Jackson Eaton

Jonathan Jennings Ford Motor Company

Jeff Jorge Baker Tilly

Simon Keeton onsemi

Fred Lee KTON

Bill Long MEMA

Ginger Junker OESA

John McElroy Blue Sky Productions

John Murphy Bank of America

Daniel Pink Bestselling Author

Matthew Renna Volkswagen of America, Inc.

Jeff Schuster LMC Automotive

Inga von Seelen Volkswagen of America, Inc.

Thomas Wendt Bain & Company

Ann Wilson MEMA

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Conference sponsorship opportunities are filling up fast. Contact Adam Slaman at aslaman@oesa. org or 734.735.0350 for available sponsorship opportunities.

Thank you to the following sponsors for supporting this year's conference...

Platinum Sponsors:

Presenting Sponsor:

Premier Sponsors:

™

Host Committee:

Breakfast Sponsor:

Reception Sponsor:

Register for OESA events at www.oesa.org.

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

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INNOVATION IN THE INDUSTRY

Recharge Supplier Innovation to Breakthrough!

Mike Jackson Executive Director, Strategy and Research 248.430.5954 │ mjackson@oesa.org

The sequential crises of the COVID-19 pandemic and resulting supply chain disruptions have taken a toll on the economy and auto industry, driving suppliers to do more with less. Innovation is the fuel to delight customers, outpace competitors and drive out-sized returns on investments – even more vital in a challenging market environment. Suppliers must assess and prioritize investments in the context of new market realities, while taking calculated risks.

Innovation is at the very heart of the automotive industry. The industry continues to change, transitioning from the past vertically oriented top-down hierarchical approach toward a more lateral, collaborative peer-to-peer ecosystem. Recent history reminds us that not every program or feature is a commercial success, yet increasingly the supplier community recognizes the value of intellectual curiosity and continual learning. Many of these calculated risks provide know how to achieve the next breakthrough.

As the industry continues to retrench and emerge from the impact of the pandemic, new approaches offer an opportunity to surpass expectations and realize gains. Partnerships are a vital pathway to gain insight and expertise while reducing risk. OESA invites industry executives to learn valuable innovation outcomes from dynamic supplier executives who are reinventing processes to gain advantage at the Leveraging Capital and Collaboration to Accelerate Innovation event on October 21, 2021, in person at the OESA Conference Center and virtually via Zoom.

Leading industry analyst, Colin Langan, automotive & mobility, Wells Fargo, will kick-off the discussion with a detailed sector analysis. He will share Wall Street perspectives on supplier innovators funding advanced technologies to position for growth through the industry recovery.

Jim Penman, managing director, Donnelly Penman & Partners, will discuss industry dynamics, highlighting supplier value creation including compelling examples along with a debrief of an evolving M&A paradigm to optimize capital allocation and investment strategies.

Dan Bonucchi, associate, Warner Norcross + Judd, will give a detailed review on the legal landscape within a rapidly changing marketplace, sharing critical factors when establishing M&A strategies and technology partnerships as suppliers position for success within the innovation process.

Industry mega trends continue to exert undue influence on future business strategies, including a dramatic shift from hardware toward software. To this end, the industry offers dramatically different approaches between traditional and emerging automakers, offering both risk and reward.

Hear from Jean-Luc Blancou, Group Business Development Senior Vice President, Novares, on ways the global plastic solutions leader in automotive is gaining momentum by embracing open innovation and prioritizing collaboration. This pursuit has strong support from the top, as Novares CEO, Pierre Boulet served on an expert jury to judge startup pitches at their third annual ‘Novares Venture Day’ in June. Novares CEO Pierre Boulet said, “We want to continue to invest in innovation and we are committed to rapidly integrating the best ideas into our automotive portfolio.”

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Learn from industry expert, Artur Seidel, Vice President of the Americas, Elektrobit, on ways suppliers can leverage available tools to speed software development and increase reliability. Of a typical vehicle today that requires 100-200 million lines of code, Seidel says about 60% is nondifferentiating software. Elektrobit is helping automakers and suppliers through its software platform called EB xelor, made of a collection of foundational software. EB xelor offers stakeholders a production-proven solution with open-source and third-party software.

Brose Tuscaloosa sparks innovation by arming teams with culture and technology. Recent investments in plant and equipment help tell a great story: 99.8% on-time delivery, 60% reduction in scrap, 36% increase in first-pass yield. However, in response to a tight labor market, Brose has created a compelling environment that brings workers in and keeps them engaged. Gain rich insights from Jim Barbaretta, general manager of Tuscaloosa and New Boston on Brose’s ‘management build’ program as well as its mechatronics apprenticeship effort with Lawson State Community College.

The pandemic has created new challenges yet accelerated opportunities driving suppliers to do more with less. Nearly all auto makers are working with their venture capital arms to foster innovation and gain awareness in scouting technology. Suppliers have cost-effective opportunities to realize gains with little expense by using new approaches.

Supporting Sponsors:

Panelists:

Register for OESA events at www.oesa.org.

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

Contact Mike Jackson to learn more about automotive supplier sentiment. He can also provide information on economic and industry trends, as well as the Chief Financial and Chief Purchasing Officers Councils.

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OESA EVENTS

Members-Only Volkswagen Town Hall

October 5 | 12:00 - 4:00 p.m. | Laurel Manor | Livonia, MI OESA members are invited to participate in the 12th annual Volkswagen Group of America Town Hall on October 5, 2021, at Laurel Manor, Livonia, MI. OESA members will hear directly from VW purchasing executives on plans and needs in the near and long term.

Inga von Seelen, senior vice president purchasing, Volkswagen of America, Inc., will share a North American organization update, as well as information on stabilization and digitalization in the supply chain and Volkswagen’s BEV transition.

VW commodity directors and managers will also be available following the formal meeting, allowing OESA members to spend a few minutes asking questions and exchanging contact information.

Attendees participating virtually will have access to the program and Q&A session. Networking with VW executives is only available for in-person attendees.

Networking Sponsor:

Executive Sponsor:

Supporting Sponsors:

Industry Partner:

Register for OESA events at www.oesa.org.

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

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Automotive Tooling Update

October 14 | 9:00 a.m. - 3:00 p.m. | Laurel Manor | Livonia, MI OESA and Harbour Results Inc., are pleased to host the Automotive Tooling Update on Oct. 14, 2021, to be held at Laurel Manor in Livonia, Mich., and virtually via Zoom. Automotive tooling executives from supplier companies, OEM purchasing, and sales, marketing and engineering professionals in the automotive mold and die industries should plan to attend.

This annual event brings automotive tooling professionals together with industry experts to discuss supply chain and labor challenges, production outlooks and unique opportunities for tooling manufacturers to put their organizations in the best position for success.

Industry experts lending insight include Cara Walton, engagement manager, Harbour Results, Inc. (HRI), who will share an update on the current economy and its impact on the tooling industry. Joe McCabe, president and CEO, AFS, will share an automotive industry forecast to help executives prepare their companies for future production demands.

Keynote speaker, Trevor Pawl, chief mobility officer, State of Michigan, will share an update on Michigan’s focus on the future of mobility.

In addition, Matt Trentacosta, business analysis manager, HRI, will share insight on the impact of the changing automotive landscape on the supply chain, and Laurie Harbour, president and CEO, HRI, will discuss the forecast of the tooling industry and best practices tool makers can implement for success.

Register for OESA events at www.oesa.org.

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

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WELCOME NEW OESA MEMBERS IAV Automotive Engineering 15620 Technology Dr. Northville, MI 48168 www.iav.com

Member Representative: Michele Compton, General Counsel Alternate Representative: Michael Lembke, President

InDepth Engineering Solutions, LLC

850 Stephenson Highway, Suite 322 Troy, MI 48083 www.InDepthEngSol.com Member Representative: Rajesh Garg, Vice President Alternate Representative: Kirk Monjarez, Vice President, Business Development

Martin Technologies

Microsoft

Member Representative: Harold Martin, CEO Alternate Representative: Harold Michael, Automotive Wiring Supervisor Business Development

Member Representative: Aaron Lee, Industry Marketing, Automotive & Manufacturing

Palantir Technologies

Sanden International (U.S.A.), Inc.

Member Representative: Michael McBrien, Director of Strategic Accounts - Automotive

Member Representative: Mark Swanson, Vice President, Sales and Marketing Alternate Representative: Mark Ulfig, President

Skill Demand Corp.

Vitesco Technologies

Member Representative: Lav Jhanji, COO Alternate Representative: Kathryn Brewer, Client Relationship Manger

Member Representative: Matthias Nedergger, Head of Business Development & Strategy NA

55390 Lyon Industrial Drive New Hudson, MI www.HaroldMartin.com

1555 Blake St. Denver, CO 80202 www.palantir.com

1119 Keystone Way, Ste 202 Carmel, IN 46032 www.skilldemand.com

Tune In! Tune in to "Automotive Insiders" for the latest in automotive and supplier industry news. Learn how companies are thriving in the new mobility landscape.​ Listen in at VoiceAmerica.com.

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1 Microsoft Way Redmond, WA 98052 www.microsoft.com/industry

47772 Haylard Dr. Plymouth, MI 48170 www.sanden.com

2400 Executive Hills Blvd.

Auburn Hills, MI 48326 vitesco-technologies.com

For OESA membership information, contact:

Steve Horaney Vice President, Membership and Sales 248.430.5969 shoraney@oesa.org

Erin Schrieber Adam Slaman Manager, Manager, Membership Sponsorship Sales and Recruitment Membership and Development Development 248.430.5970 248.430.5958 eschrieber@oesa.org aslaman@oesa.org

OESA EVENTS Upcoming OESA Events: Oct. 5

Volkswagen Town Hall

Oct. 14

Harbour Results, Inc. Automtoive Tooling Update

Oct. 21

Leveraging Capital and Collaboration to Accelerate Innovation

Upcoming Council Meetings: Oct. 5

Young Leadership Council 9 (YLC9)

Oct. 6

Automotive Public Relations Council (APRC)

Oct. 12

Legal Issues Council (LIC)

Oct. 19

Advanced Technology Council (ATC)

Oct. 20

Operations & Plant Managers Council (OPMC)

Oct. 21

Young Leadership Council 7 Graduation Reception (YLC)

Oct. 28

Human Resources Council (HRC)

Learn more about OESA’s Peer Group Council Network at oesa.org/councils or call 248.952.6401.

Upcoming 2021 OESA Town Hall Meetings

Mark your calendar for the members-only OEM Town Hall meetings:

Oct. 5

Volkswagen Town Hall

Dec. 2

Ford Town Hall OESA News - 2021 Third Quarter

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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

Lexi Putman Member Services Representative

248.430.5964 abuford@oesa.org

248.430.5951 jlaskowski@oesa.org

248.430.5957 anapier@oesa.org

248.430.5959 lputman@oesa.org