Applause for Funding Awarded to Automotive-Parts Suppliers

A recent public statement from vehicle-supplier association MEMA applauds actions taken by the Biden-Harris Administration in support of small- and medium-sized manufacturers of automotive parts. Specifically, the administration has made more than $100 million in funding available to support suppliers in a variety of initiatives.  Among the actions:

• Funding aimed to help automotive-parts suppliers expand or retool their facilities, and address infrastructure needs such as energy efficiency and cybersecurity.
• Expanding workforce training and improving job quality within the electric-vehicle (EV) supply chain.
• The introduction of innovative technical-assistance programs designed to support manufacturers and their communities in their efforts to capitalize on the growth opportunities presented by the EV sector.

“This significant investment and comprehensive set of actions undoubtedly will have a meaningful impact for the sector,” notes Bill Long, MEMA president and CEO. “This is a clear step in the right direction, empowering automotive-parts suppliers to thrive in the evolving vehicle ecosystem.”

The ongoing, albeit slow, transition to EVs threatens the industry’s long-time mantra of “economies of scale,” upon which the supply chain rests its laurels. The newest term on the scene: “Diseconomies of scale,” meaning that average unit costs actually rise as output increases. This is highlighted today, for example, as OEMs continue the trend of insourcing the manufacture of EV-powertrain components. 

Automotive-parts suppliers increasingly are challenged in this new era to provide flexibility in their ability to supply components for both ICE and electric vehicles—that is, where there’s overlap, as with chassis and body-structure components and assemblies. However, “large-volume parts suppliers likely will put most of their eggs in the e-mobility basket,” notes a recent Supply Chain Brain article, “and significantly cut production of traditional components … forcing smaller manufacturers and aftermarket suppliers to seek alternative supply to service existing fleets and lower-volume production.

“There is a growing need for parts suppliers that can offer the necessary design flexibility, and customized engineering to plug the gap,” the article concludes. “This is especially the case when a component is not officially discontinued, and the manufacturer is not obliged to share drawings or designs.”

Challenging times indeed, with only bigger hurdles ahead. Fear not, however, as PMA has set the stage for the 2024 edition of its annual Automotive Parts Suppliers Conference, slated for September 11-12 in Pontiac, MI.  The packed agenda includes these and other talks:

• Evolving Trends in the Commercial-Vehicle Market, from James Taylor, executive sales director, North American, Cummins Meritor
• Reimagining Automotive Manufacturing with Robotics and Artificial Intelligence, by Colton Sampson, director of business development and partnerships, Machina Labs
• A keynote presentation on the state of the industry, by Jeff Schuster, group head and executive vice president, automotive, for Global Data
• A roundtable discussion on the ever-evolving automotive supply chain, moderated by MEMA vice president of sales and membership Steve Horaney.