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No Turf Is Safe, Michigan Must Remain Brains of Auto Industry to Be Relevant

Buoyed by an anticipated surge in global middle-class spending in the trillions of dollars and a Chinese market that is expected to provide millions of new customers, the automotive industry is growing and plush with opportunity.

That opportunity is as lucrative as it is fleeting in a new era defined by consumer demand, product customization and unprecedented technological innovation – where there’s no sacred turf and the automotive supply chain contorts and configures like never before to accommodate the global economic forces at play.

Viewing these trends through his 40 years of automotive and business experience, International Automotive Components President and CEO Steve Miller of Delphi and Chrysler fame has a simple message: Michigan’s leadership in R & D must continue to retain its position as the global automotive capital. An effort in which the Michigan Mobility Initiative will play a key role.

“Our dominance is threatened by shifting trends,” said Miller to more than 100 key industry executives and stakeholders at the MICHauto Annual Meeting last Thursday evening. “The U.S. is no longer the world’s biggest market. (Michigan) will need to continue to be the brains behind the unfolding technology story if we are to retain our relevance in the century to come.”

A challenge heightened in Miller’s eyes by the U.S.’s perilous standing as a manufacturing nation due in large part to the failure of the U.S. education system to develop the technical skills needed in the future. In addition to a talent shortage, spiraling health care costs put this nation’s employers at a disadvantage.

“Combine that with the growing anti-business political and regulatory environment, and it is hard to see how the U.S. factories can keep up with global trends,” said Miller, whose Luxembourg-headquartered IAC is one of four major global players in automotive interiors with 30,000 employees, about $6 billion in annual revenue and regional operational centers in Southfield, Düsseldorf and Shanghai.

Despite those challenges, however, the industry veteran casts a youthful excitement for the industry’s future, perhaps reflecting the moniker “The Turnaround Kid” from the autobiography chronicling his success in rescuing companies from Chrysler to Delphi.

“You know, I wish I were 25 and starting over again. The auto business may be over a century old, but it is entering its most exciting era yet,” Miller said, acknowledging the innovation ahead in pursuit of the autonomous vehicle, increased fuel standards and other trends. “The pace of automotive industry change in just the five or so years since I left Delphi has been breathtaking.”

Some of the changes that most have Miller’s attention?

1) The incredible growth of China into the No. 1 carmaker with vehicle penetration estimates that offer tremendous opportunity.

2) Companies that survived Chapter 11 emerged leaner and forever transformed, but now have the opposite problem of keeping up with robust market conditions.

3) The frequency in which automakers change their models, an expensive endeavor that challenges suppliers.

4) The growing shortage of skilled workers, particularly in the skilled trades.

5) The damaged credibility of the industry with the public after recent high-profile recall and emission scandals, which he expects to bring the wrath of regulators.

In the face of those changes, Miller expressed confidence in efforts to bolster Michigan’s industry, particularly the Michigan Mobility Initiative, a coalition including MICHauto, to expand Michigan’s global leadership of connected vehicle technology and R&D.

“I do believe the state is on the right track to establish itself as the premier location for next-generation mobility research and development,” said Miller before concluding in a question-and-answer session with MICHauto Vice President Glenn Stevens.