DETROIT - In the last six weeks, Michael Mackens has been in eight different countries in Europe and North and South America, delivering sales pitches to automakers about the fuel tanks, bumpers and fascias produced by Plastic Omnium SA. This is how the new global automotive supply industry works: a Detroit-born sales executive works for a French company that makes parts in South Carolina for German and U.S. automakers.
``The global purchasing community is indeed very closely linked,'' said Mackens, sales and marketing manager for Plastic Omnium's North American Operations. ``It becomes a very small world.''
Smaller. And much more competitive.
For years now, automakers have been thinning their supplier ranks, moving toward a system where a few large parts makers design and produce parts and larger assemblies - even entire systems such as the cockpit of a car.
The globalization of the automotive industry, the expansion out of mature markets in North America, Western Europe and Japan into developing regions such as India and China, is accelerating this supplier consolidation.
For the winners, the rewards will come in the form of huge global supply contracts. But those suppliers that do not make the cut will be absorbed by larger companies, serve as subcontractors or get out of the business.
No more than 15 or 20 ``genuine global'' full-service suppliers will survive by the year 2010, predicts George Simpson, chairman of the English parts-making concern Lucas Industries plc, according to a recent report in Automotive News Europe, a sister publication of Plastics News.
Suppliers are scrambling to be, it seems, everywhere at once. Not only are they trying to hold onto current business, and expand their customer base as they move into new markets, but they also are having to learn how to manage global operations.
Le Profil Industries, a French-owned supplier of underhood, interior and exterior plastic parts to European automakers, opened a Detroit-area sales office in January.
The supplier needed to be closer to a Ford Motor Co. vehicle development team in Dearborn, Mich., which is redesigning a commercial van. Because Le Profil currently supplies parts for the van, and wants to continue that business, it moved to Detroit when Ford's own globalization program shifted the development effort from England to the United States.
``That's the goal,'' said Lawrence Grosmougin, a sales executive with Le Profil. ``Keep the existing business.''
Nowhere now is this supplier consolidation more intense than in North America and Western Europe, which represent a combined annual market of more than 30 million cars and trucks. Without a strong position in these key markets, any global strategy becomes unworkable.
Earlier this month, Becker Group Inc. of Warren, Mich., announced it acquired Gebr. Happich GmbH of Wuppertal, Germany, in a deal that created an interior components supplier with projected 1996 sales of $1.4 billion and links to key automakers on both sides of the Atlantic.
At Plastic Omnium, the impetus for building a $30 million plant for the North American market was to supply parts for the new BMW AG assembly plant that opened in late 1994in Greer, S.C.
The BMW plant, and another assembly plant Mercedes-Benz AG plans to put in production in Vance, Ala., in early 1997, allowed many European suppliers to set up an operation in North America with an existing customer.
Beginning with its initial contract with BMW, Plastic Omnium has expanded its business to include contracts for General Motors Corp. Not unusual, considering the French firm already was a major supplier to GM's Adam Opel AG unit in Europe.
Currently, Mackens said, Plastic Omnium has about $68 million in orders booked between BMW and GM, enough to bring its new plant in Anderson, S.C., to capacity by 1998-99. Plastic Omnium, confident of continuing that growth, may now expand the Anderson plant or build a second U.S. factory.
What's more, through the acquisition last summer of French-owned Reydel, a major supplier of interior trim, Plastic Omnium has a new business to bring to the competition. But Mackens said it was too early after the Reydel acquisition to discuss any plans Plastic Omnium may have for developing an interior parts business in North America.
For the past two years in France, automakers have pushed suppliers even harder to globalize activities, said Gregoire van de Velde, president of Automo-tive Strategy, a management consulting firm with offices in Detroit and Paris.
Some French automakers are going so far as to publicly encourage suppliers to do business with Japanese plants in Europe, van de Velde said. The thinking is that European suppliers would strengthen their product development skills and manufacturing productivity by working with the Japanese. Suppliers could then apply those sharpened skills to their European business.
Van de Velde, whose company specializes in the competitive benchmarking of automakers and suppliers, said European plastics firms are leaders in processing technology while North American suppliers are clearly dominant in project management abilities.
Everywhere there is a premium on managerial talent that can manage a global organization, he said. This is especially critical for a company that still may be controlled by its founder.
``The challenge has been to turn management from basically a one-man operation into an international organization,'' van de Velde said.
The best European managers, he said, ``have a natural global vision of the business.''
Van de Velde gives high marks for management skills to such major suppliers as French-owned Valeo, Somer Allibert SA and Plastic Omnium, but also Delphi Automotive Systems, the parts-making arm of General Motors.
Delphi, which has been rapidly expanding its business outside of General Motors and North America, had total 1995 sales of $28 billion. Sales in Europe last year increased 25 percent to $4.2 billion. And last month, Delphi announced its 40th joint venture.
Delphi has impressed European automakers with its aggressive marketing and extensive project management skills, van de Velde said.
``In general, if I were one of the Tier 1 suppliers in Europe, I would fear Delphi,'' he said.
Management recruiter Jay Braboy, whose Franklin, Mich.-based practice specializes in automotive plastics, estimates that about 60 percent of his business now involves foreign firms seeking to staff a North American office or joint venture. He expects that international activity to increase.
The best plastics companies are finding ways to translate new technology into commercial products and, just as important, explain these strengths to customers, Braboy said.
The weaker companies still are trying to figure this out.
``There are many organizations that have a fair number of employees wandering around day to day who still don't comprehend what this new relationship means,'' Braboy said.
If some are confused, it's probably for good reason.
In a study of the global supply base to be published this year, International Business Development Corp. of Grand Rapids, Mich., puts the predicament this way: ``None of the traditional [organizational] models meet today's market demands for the simultaneous needs of global integration, local differentiation, high quality, low price and worldwide innovation.''
IBD President Donna Parolini sees an industry moving toward two types of suppliers: full-service firms and low-cost manufacturers. The full-service supplier will deal directly with the automaker and the low-cost firm will act as a subcontractor to the full-service supplier. Consolidation means concentration and many parts makers, some with outstanding products, won't make the cut. Parolini, who develops strategies for suppliers, sees many small firms falling hopelessly behind the ``billionaire'' club of major parts firms.
``There are a lot of good companies out there that just aren't getting the orders,'' she said.