Traverse City Record-Eagle

August 9, 2013

Transition equals opportunity for region

Traverse City Record-Eagle

---- — TRAVERSE CITY — Michigan’s auto industry is undergoing dramatic change thanks to federal fuel mileage standards, but it’s an opportunity for northern Michigan entrepreneurs and businesses to capitalize on the transition.

That’s a prediction from Jay Baron, president of the Center for Automotive Research, who was in Traverse City this week for the 2013 Center for Automotive Research Management conference.

The nearly week-long conference at the Grand Traverse Resort & Spa draws auto industry executives, product manufacturers and parts suppliers from across the globe to the cherry capital.

Baron said northern Michigan businesses have fresh opportunities before them because of requirements that vehicles achieve 54.5 miles per gallon by 2025. That means major car companies are exploring a myriad of new technologies to make cars lighter and more fuel efficient, offering chances for business success for companies to seize on new technologies to assist car makers during the transition.

“It impacts so many companies that are in the supply chain producing parts,” Baron said. “All of it is changing.”

Tool and die manufacturers in northern Michigan that supply parts to the auto industry, Baron said, need to adjust to the changing technologies, including the trend of making cars out of aluminum versus steel. The amount of aluminum in cars increased seven pounds a year for roughly the last 15 years, he said, and that’s only going to increase.

“Tooling for aluminum parts is different than steel parts,” Baron said. “It impacts the tool and die shops.”

“(Business people) need to know what’s coming, and they have to change over their knowledge base to transform their own skill sets as we go from mild steel and high-strength steel to aluminum,” he said. “These tool and die shops are making the transformation, and they have to be aware of the technology and what’s happening. Otherwise, the world is going to leave them in the past.”

Consumers should prepare for big changes in vehicles of the future, as well. Baron said cars “will feel different” as car makers use new engine technologies, electricity, and powertrain systems to increase fuel mileage standards in vehicles.

“The auto companies are worried because not only are they (vehicles) going to cost more, but they’ll feel different,” he said. “It’s a big issue ... the goal is lightness, and when you have lighter, you can use a smaller engine and you can downsize your brakes.

“Is the government going to push these incentives to try to get people to buy cars?” Baron said. “The car companies don’t want to make these technologies and then have people not buy them. That’s where the heartburn is coming from. Where do we go with all this?”