Automakers are paying customers to buy their cars. Suppliers are running on empty margins. Workers are losing their jobs.
Tom Stallkamp believes that the auto industry is in a deep mess. And unless things change soon, he says, they're going to get a lot worse.
That's harsh stuff.
And it came in a speech - carefully aimed at automakers and their suppliers - delivered by an executive who has gained a measure of credibility for speaking out on such matters. Stallkamp, 56, has worked both sides of the manufacturing fence.
During his two decades at Chrysler Corp., he was president, a celebrated purchasing chief and head of its parts subsidiary. For the past three years, he has been chief executive officer of MSX International Inc., a management services supplier in Southfield.
The speech was delivered in October at the Global Leadership Conference, the newly renamed meeting of suppliers and automakers held at the Greenbrier resort near White Sulphur Springs, W.Va.
It blended calls for practical change - such as consistent behavior from automakers - with a more utopian vision of a consortium that would cut through the competitive clutter and work for the common good.
``We have only limited time before the nature of the business is permanently and irreparably harmed,'' Stallkamp said. ``If changes aren't brought into the entire industry in a coordinated way, the natural economic forces will drive investment out of this industry and into others that offer a better return.''
In an interview in his office five days after the speech, Stallkamp said he hears a lot of griping about how tough things are in the auto business - but not enough talking about solutions. He wanted to deliver a message that the entire industry would hear. Top supplier executives are always at the Greenbrier meeting. This year, for the first time, the automaker chiefs came from several companies, not just one.
DaimlerChrysler AG CEO Dieter Zetsche shared the stage with Stallkamp, as did Nissan's North America Inc.'s chief Norio Matsumura and Toyota Motor North America's CEO, Toshiaki Taguchi. General Motors Corp. Vice Chairman Robert Lutz and Ford Motor Co. Chief Operating Officer Nick Scheele spoke the next day.
Stallkamp's first new rule of order, ``Let suppliers make a profit,'' got big applause. A line about the latest automotive fad, the recycling of retired executives, drew a chuckle as well.
Stallkamp called for automakers to fund the consortium to help remove inefficiencies. There is too much competition in areas where there's no need to compete, he said.
``This group would not be controlled by any single [original equipment manufacturer] and would be managed by independent personnel from the supply base, OEMs and outside thinkers,'' Stallkamp said. ``It would concentrate on commonization of standards for process and procedures that interrelate the chain as a unit.''
A simple example: gloves. Every supplier and automaker orders gloves for factory workers. Sometimes, every factory within a company orders them separately. Yet, gloves provide no competitive advantage. Why can't the industry save a bundle by ordering them together?
Paul Wilbur, CEO of convertible specialist ASC Inc. in Southgate, Mich., said Stallkamp's speech reinforced his reputation as a senior statesman who tackles challenges others are reluctant to confront.
Wilbur also sees a lot of waste in the system, but he isn't sure a consortium is the answer. Stallkamp ``raised the issues,'' Wilbur said. ``The question now is how we get through to them.''
For his part, Stallkamp said he isn't wedded to his answer. He'd be happy if his ideas generated other ideas for fixes. Whatever the solution, the stakes are high.
``We can't continue to pay people to buy our products, drive supplying firms into zero return margins and disemploy the work force,'' he said in his speech. ``Our country's economic revival depends on how fast we can galvanize the forces that now are on different pages to get on the same page.''
By automotive standards, Stallkamp's MSX is a small company. Its annual sales of $800 million are less than what Chrysler used to save annually through Stallkamp's cost-cutting initiatives with his suppliers.
The day after the interview, Stallkamp went to Boston, where he teaches a class at Babson College every other week.
That assignment might appear to be over the edge for a CEO from Detroit, but Stallkamp said the fun has gone out of the auto business. As he pushes for the return of fun to the auto world, perhaps he finds traces of it on a college campus.