In Detroit, automakers get the lion’s share of attention while suppliers take a lower profile.
But on Wednesday, one of the largest North American-based suppliers discussed how it is addressing key issues such as tariffs, supply chains and artificial intelligence.
Lear Corp., based in the Detroit suburb of Southfield, produces seats and auto electronic systems.
“We are talking to every OEM right now,” Ray Scott, the company’s president and CEO, said during an Automotive Press Association event at Lear headquarters. “We consider ourselves to be a valuable asset.”
Lear is a Tier 1 supplier for original equipment makers, or automakers. Lear is supplied, in turn, by smaller automotive companies.
Scott provided a look at the issues it currently is confronting.
Tariffs: The Trump administration has levied tariffs on a variety of goods, including vehicles and automotive parts. Such tariffs are paid by companies who import products. The importers often pass along those costs to consumers.
The administration’s stated goal is to increase U.S. output of vehicles and parts.
“I’m all for building more here in the U.S.,” Scott said. “We can onshore where it’s necessary.”
Supply chain: Lear is examining its supply chain. “We have to look more regionally,” he said. The company is “having an appreciation where components come from.”
Artificial intelligence: Lear is looking to artificial intelligence to improve its efficiency and design, the CEO said.
“We’ve really pushed digital tools in automation,” Scott said. AI can help examine prices and data from Lear suppliers.
“These tools are optimizing peoples’ jobs,” according to the CEO. AI can hasten examination of parts and prices permitting company purchasing employees to spend more time with vendors, he added.
China: Scott agreed that China presents a major challenge to U.S. and European automakers by how it has cut costs and speeded development of new vehicles.
Lear has factories in China and has witnessed the challenge firsthand. “We manufacture for China, in China,” the CEO said
In China, Scott said his company has been “blown away how quickly they moved to innovate products.”
Corporate Culture: Scott said Lear wants a unified approach to the company’s business.
“It only takes one person to take the culture down significantly,” he said. “I’ve been in meetings where people don’t listen, they talk over other people. That’s not the kind of culture we want.”
Industry consolidation: Scott said he expects consolidation among automotive suppliers.
“I think there will be consolidation in the supply base,” he said. There is “too much capacity.”
