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

MGS buying N.Y. medical molding plant from Hospira

April 17, 2014 10:19 pm ET

MGS Manufacturing Group is purchasing the Buffalo, N.Y., injection molding facility and related product line of Hospira Inc., effective July 1. Terms ...    More

Proposed Shell project draws more than 1,000 to informational meetings

April 17, 2014 2:03 pm ET

More than 1,000 people attended a pair of public meetings hosted by Shell Chemical LP on April 16 to discuss the possibility of building a major...    More

Image

Plastics News reporter wins journalism awards

April 17, 2014 11:03 am ET

Asia Bureau Chief Steve Toloken won two first place awards for the Society of Professional Journalists' Detroit chapter.    More

Image

Hedging can slow the resin rollercoaster

April 17, 2014 3:00 pm ET

The good old days — if they even ever existed — are gone, and.Andy VanPutte thinks volatility in the resin market is here to stay and...    More

Image

Navigating the rough seas of selling your company

April 17, 2014 2:47 pm ET

For family owned plastics firms who survived the Great Recession, many wonder: Is it time to sell, retire and sip cocktails on the beach? Or, maybe fi...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events