IAC executive: Auto suppliers need to do more with less

STERLING HEIGHTS, MICH. (Oct. 5, 9:15 p.m. ET) -- As the auto industry works to find its way out of recession, automakers and suppliers alike will need to change the way they do business.

Federal standards will push carmakers toward lighter and more efficient cars, while consumers will demand more comfort and convenience from the cars they buy. That will put even more pressure on the industry to do more with what they already have, said Maurice Sessel, vice president of advanced engineering for International Automotive Components LLC during the Society of Plastics Engineers’ 2009 Automotive TPO Conference.

Companies like IAC and its competitors cannot afford to invest million of dollars on new capital equipment for each contract, Sessel said Oct. 5 during the conference in Sterling Heights.

“Somehow we’ve really got to pick and choose where we’re going to make our [research and development] investments,” he said. “We’ve got to really optimize what we can do with the capital we’ve already got.”

Consider the way things used to be, just a few years ago. One of IAC’s precursor companies -- the interior supplier is made up of production units from a variety of companies including Lear Corp., Collins & Aikman Corp. and UT Automotive -- spent millions of dollars at two different plants to make parts for a new vehicle. It was a great contract, Sessel said, but just four-and-a-half years later, the car’s interior was updated and much of that new investment was obsolete.

“We can’t afford to continually spend that kind of money on every refresh,” he said.

At the same time, suppliers cannot afford to refuse to make parts carmakers want. The challenge will be to make those parts -- including ones that are lighter in weight, environmentally friendly and have look and feel consumers want -- without going broke on new technology.

IAC has been relying on vertical integration and pushing to get involved early to help it balance customers’ requirements and economic concerns. In one case, the company was having problems finding the right resin at an affordable price that would meet all the requirements, Sessel said. The company turned to its own in-house capabilities in compounding to create its own blend and coupled that with IAC’s nickel tooling operations.

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