Plastics Pipeline Blog

Guest Blogger – Glenn Stevens

Team 1 Plastics, a plastic injection molding company for the transportation industry, is thrilled that Glenn Stevens, executive director of the Detroit Regional Chamber MICHauto and vice president of the chamber’s Automotive & Mobility Initiatives, graciously agreed to be a Guest Blogger for the Plastics Pipeline blog. In an email interview, Stevens shared his perspective on how Michigan’s automobile industry is fairing.

Many companies have moved facilities to the southern region of the United States or to Mexican locations. For example, Porsche, Mercedes, Nissan, and Toyota all have their headquarters in southern states. Is Michigan losing its competitive edge as the center of the automotive industry in North America?

Over the past couple of decades, there has certainly been an expansion of new OEM (Original Equipment Manufacturer) facilities in the southeast and in Mexico. With that shift has come a relocation of supplier facilities around those clusters of OEM plants. At the same time, the industry has a whole has become more and more global.

However, Michigan is certainly not losing its mantle as being the center of the automotive industry in North America.

There are 17 OEMs with global headquarters and/or North American R&D (Research and Development) and Technical Centers located in Southeast Michigan. 93 of the Top 100 suppliers to North America either have their global headquarters in Michigan or have a North American headquarters in Michigan. There are over 2,200 technical, research, and engineering centers in Michigan.

While Toyota did consolidate its North American headquarters in Plano, Texas, they also made a very significant move in relocating their purchasing functions from northern Kentucky to Michigan. All of Toyota’s North American purchasing and engineering is centered in Michigan.

The automotive supply chain is incredibly dense and complex in Michigan. In fact, there is no other cluster like it in the world.

With the rise of Asia and other markets, suppliers have had to make the decisions to expand, create partnerships, or became more efficient in how they compete. The critical factor that enables companies to succeed, particularly smaller tier suppliers, is the ability to apply lean principles and innovations on the shop floor and in the overall management of their companies.

How is “car sharing” affecting the auto industry in Michigan?

The world is changing. There are megatrend forces at work that are shaping the present and will be key to how people, goods, data, and services move more efficiently in the future. These mobility trends are at the forefront of today’s conversations. As hyper-urbanization – the trend of people moving to and living in cities – rises, the simple fact is that everyone cannot, and may choose not to, utilize traditional transportation. This has brought on the growth of MaaS (Mobility as a Service). This is where ride sharing, and connecting of different forms of intermodal transportation utilizing technology, comes into play, and it is definitely impacting Michigan.

It is said that the global auto industry today is a $3 Trillion industry. Personal mobility in a shared-use economy is projected to be a $10 Trillion industry. “Traditional” OEMs and suppliers must adapt. They need to change their business models and their ability to be able to capitalize on the market and to fulfill the changing shifts of transportation and consumer preferences.

Michigan is not standing still. Just like the Ford Company is adapting to the shifts of technology, the State must also. There is a tremendous amount of synergy that is being driven from Governor Rick Snyder. Economic development groups, business groups, universities, transportation organizations, and many others are all working together to make sure that we protect and retain the State’s traditional auto industry, while at the same time, making sure that the State is leading in the testing and research for next-generation mobility solutions. As transportation changes, Michigan must change with it.

Thinking about the emerging technology of autonomous cars, electric cars, and connectivity, when do you think these technologies will become mainstream and begin to dominate the automotive industry? How will these new technologies affect vehicle production in Michigan? How is Michigan trying to attract some of the new disruptive automotive companies (such as Tesla, Google, and Apple)?

The convergence of the auto and tech industries has certainly been something to watch. Companies in Detroit, global auto OEMs, and suppliers have opened offices in Silicon Valley. At the same time, tech companies have opened facilities in Michigan. With the density of the automotive cluster, the number of OEMs, research facilities, and testing that is done in next-generation mobility, tech companies are finding that they need to be in Michigan. The cross-currents between Detroit and the Valley continue to grow stronger every day.

There are 50,000 lines of code in a typical phone app, 5 million lines of code in a jet fighter, and 10 million lines of code in the Ford GT. The connected car is here. The car is the most high-tech consumer product on the face of the earth, and it is one of the centers of the Internet of Things.

EV (Electric Vehicle) technology continues to grow. While it is currently a small percentage of the market, both government mandates around the world and demand from consumers will fuel its growth. Automated technology is coming. While far from mainstream, it is already being deployed in “last mile” applications, and it will continue to grow in its deployment.

If I could forecast when these technologies would become “mainstream,” I would be in a different business, but all of them are quite prevalent in our transportation world today. Michigan and the companies that make up our automobile industry are evolving with the changing world. Michigan still produces about 20% of NAFTA production. Our 11 assembly plants have been modernized and are quite busy with successful products for the market, especially in truck and SUV production. As mobility technology changes, propulsion systems evolve, and the global market continues to take shape, the companies that build vehicles in Michigan will evolve with it.

There will continue to be a demand for F-150 trucks for the foreseeable future, but these vehicles will change as they become more electrified, connected, and automated. It is my hope that companies in Michigan will continue to design, engineer, and build the cars and trucks of today and the next-generation of mobility solutions for many, many years into the future.

How can small Tier 2 and Tier 3 suppliers like Team 1 Plastics prepare for these changes?

All companies must evolve and change with the times. Standing still and trying to do the same things into the future is not an option. Companies must find and implement the new tools of Industry 4.0 while continuing to apply the very best continuous improvement and collaboration processes that they can deploy. Companies that adapt to compete will survive and thrive.

One of the privileges of my job, and things I am very grateful about during my career, is the ability to see so many different companies, the products they make, the processes they deploy, and the people that make them go. I can sincerely say that Team 1 Plastics is certainly a very world class and unique company. You can see it on the production floor with the Team Members. It is clear in the lean principles and automation that is utilized. It is evident in the statistical process control and data that is utilized. It is also clear to me that the people that lead the company care about the people that are part of the team.

There will continue to be a bright future for Team 1 Plastics if everyone adapts to change, collaborates to compete, and keeps an undying eye on providing the customer with the highest quality, on-time, plastic components, along with the world-class customer service for which the company is known.