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turbochargers and transmissions, completed the $951mn
acquisition of Remy International Inc (Pendleton, Indiana).
Before that, in July, Magna International Inc (Ontario, Canada)
purchased the German transmission manufacturer Getrag for
$1.9bn. According to an Automotive News survey cited by
Mr Wiegand, Magna was already the second-largest
automotive supplier in the world.
The largest acquisition of 2015 had come came earlier
still, with the $12.4bn purchase by ZF Friedrichshafen AG,
also German, of TRW Automotive Holdings Corp (Livonia,
Michigan).
As a result of these so-called megadeals, smaller downstream
automotive suppliers should be prepared for some increased
price competition, Dave Andrea, executive vice-president
of research at the Ann Arbor-based Center for Automotive
Research told . But it would seem that the suppliers
have more immediate worries.
In January, the Original Equipment Supplier Association
(OESA) reported that more suppliers all the time are concerned
about their ability to adjust to the newly erratic production
scheduling of their reconstituted big clients. Julie Fream, the
president and CEO of OESA, observed that week-to-week
changes can be hard to manage; and their greater frequency
has been souring some producer/supplier relationships.
Ms Fream sees the challenges around production schedules
stemming, in part, from a rise in capacity utilisation rates at
a time when many suppliers are already operating close to
full tilt.
OESA in January identified a median capacity utilisation rate
among automotive suppliers of 85 per cent, with those in the
topmost quartile reporting 90 per cent capacity utilisation.
(“Auto Suppliers Contend With Scheduling Constraints,
Impact of Megadeals,” 21 February)
“I think when you’re operating so close to your capacity limits,
it’s much more challenging to manage than when you have a
little flexibility in your schedule,” said Ms Fream, who pointed
out the follow-on effect of difficulties from one tier to the next
in the supply chain.
› In addition to production scheduling issues, the Center
for Automotive Research expects last year’s megadeals
among large suppliers to impact West Michigan suppliers as
those companies start to integrate their operations.
Most of the megadeals of 2015 closed by the end of the year.
In 2016, Mr Andrea told in February, “Suppliers
are dealing with restructuring and what that means for the
competitive landscape now that these companies are starting
to work together as single entities.”
› The Original Equipment Supplier Association also took
note of a persistent complaint amongAmerican automotive
suppliers: too few qualified workers. OESA identified the talent
shortage as “the primary internal supplier challenge”, with 64
per cent of respondents to its January survey reporting a lack
of qualified engineering talent; 60 per cent, a scarcity of skilled
labour.
Cybersecurity is seen as a major concern for
operators of autonomous cars
“Perhaps the most harrowing problem in this zoomy future
of autonomous, software-packed vehicles may be protecting
them from hackers.
“A fast-growing density of software guides these vehicles and
collects data on everything from where we drive to what we
eat.”
As reported by Greg Gardner of the Detroit Free Press, the
takeaway from the Connected Car Symposium held on 18
February in downtown Detroit was clear and worrisome: self-
driving and connected vehicles face a future rife with threats
from hackers. (“Road to Autonomous, Connected Cars Is
Filled With Risks,” 18 February)
The event, sponsored by the law firm Butzel Long, gathered
lawyers, cybersecurity experts and software engineers to
explore the implications of the 100 million lines of software
contained in the average new car.
While this is 200 times what is needed to operate NASA’s
Space Shuttle, regulators such as the US National Highway
Traffic Safety Administration provide almost no guidance on
preventing misappropriation of the software.
Hackers have tended to focus on the information technology
(IT) world – “because that’s where the money is”, according to
a security consultant at the Detroit symposium.
But that is expected to change as more services are delivered
to and through vehicles by software apps used by drivers to
access entertainment and travel information.
As cars become savvier they will be collecting financial and
other personal data of keen interest to hackers, warned
Jennifer Dukarski, a Butzel Long attorney.
And according to McConnell Trapp of Speed Trapp Consulting
(Troy, Michigan), the growth of car-sharing and ride-sharing
networks will only compound the cybersecurity challenge.
In a rental car, for instance, wrote Mr Gardner, “The moment
a customer connects his or her smartphone to the vehicle,
that data could be exposed to any bugs or malware that have
infected phones of previous users.”
› Another threat looms in the increasing use of over-the-
air software upgrades and repairs, enabling hackers
imitating legitimate manufacturers or service providers to send
“updates” that could disable the vehicle.
Brian Dougherty, chief technology officer with the Motor
& Equipment Manufacturers Association, told the Free
Press, “The vehicle doesn’t know whether the over-the-air
software patch is coming from a white-hat or a black-hat
source.”
Dorothy Fabian,
Features Editor (USA)