Keep recession's lessons in mind

Published: February 15, 2013 4:13 pm ET
Updated: February 15, 2013 4:19 pm ET

Image By: Rich Williams

Related to this story

Topics End Markets, Automotive

This is no time to get complacent. The U.S. auto industry is back on track. Vehicle sales are expected to continue their upward trend, perhaps reaching 17 million units by 2015, experts say. And "profitability" is again a buzzword in almost every sector of the industry.

There is momentum, and it's all in the right direction.

But as the many speakers at the Automotive News World Congress cautioned last month, automakers, suppliers and dealers need to remember a few key lessons from the horrific experiences during the automotive depression.

It behooves everyone to avoid becoming inebriated by the success — and recovery — of the past 18 months. If the industry is to avoid sliding back into the ditch, important elements of the recovery and resurgence must be front of mind:

c Suppliers and automakers need to continue their pace of collaboration and partnering, which have created a wide path for innovation and given every stakeholder a piece of the success. Automakers are boosting production and speeding product development by working more closely with their suppliers. That must not change.

c In the heated race to gain market share, competition ought not be so desperate as to tarnish reputations, which would be a likely outcome if automakers return to their historic incentive battles. The recent overstatement of fuel economy numbers is a prime example of the kind of consumer trust that cannot be violated. As John Mendel, head of auto sales at American Honda Motor Co., said: "Competitive pressure should never let us betray the trust of our customers."

c The industry is working at the speed of light to incorporate new technology into vehicles, but that must be done with an eye on the negative effects of distracted driving. With the right technology, connected vehicles reduce distracted driving and improve traffic safety. That must be the goal.

c The drive for big profits cannot lead to overcapacity. Volkswagen announced at the Detroit auto show that it will add a crossover to its lineup; Kia introduced a premium sedan; BMW and Mercedes introduced entry-level luxury cars.

As billionaire private-equity investor Wilbur Ross told the World Congress audience: "Everybody seems to be expanding their product line, and you wonder if that isn't going to lead to problems."

The industry is on the road to better times. But it is crucial to remember what's in the rearview mirror.

This editorial originally appeared in Automotive News, a sister publication to Plastics News.


Comments

Keep recession's lessons in mind

Published: February 15, 2013 4:13 pm ET
Updated: February 15, 2013 4:19 pm ET

Post Your Comments


Back to story


More stories

Image

RPC Group buying Iceland's Promens

November 27, 2014 8:46 am ET

In a major acquisition that combines two rigid packaging companies with international footprints, RPC Group plc has signed a 399 million euro ($497...    More

Image

Proposed green building standard delayed until late 2016

November 27, 2014 6:00 am ET

Anyone not ready for a new green building standard — one that may include more favorable ratings for plastics — is getting something of a ...    More

Image

Group backs plastic window alternatives

November 27, 2014 6:00 am ET

A new industry working group is figuring out how to help plastic break through the glass ceiling.    More

RheTech to commercialize hemp fibers to replace glass in PP

November 27, 2014 6:00 am ET

RheTech Inc. plan to commercialize its first hemp fiber compounds in January.    More

Not every Internet dream died

November 27, 2014 6:00 am ET

The dot-com bubble was littered with plastics companies gone bust by big tech dream. But not every major e-commerce play failed.    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events