Q&A with APMA president Gerry Fedchun
May 25, 2009
By Carolyn Yates
Despite the drop in demand in the automotive industry, the APMA has been working hard to prove auto parts manufacturers are still viable. Gerry Fedchun, president of the APMA, chatted with Manufacturing AUTOMATION to discuss economics, the industry outlook and his hopes for the APMA-AUTO21 conference.
Manufacturing AUTOMATION: What is the impact of the current economic situation on auto parts makers?
Gerry Fedchun: There’s been a tremendous drop in demand because you need credit to get vehicles, and so production has been at an all-time low for the last [several] years. It has been devastating.
MA: What has your organization done or what is it doing?
GF: We spent a great deal of time with the federal and Ontario governments to ensure three things. Firstly, that in any restructuring of the assemblers, suppliers continue to be paid at a normal course, and that has more or less occurred. We also needed some receivables insurance, and that has occurred. Now, we’re in the process of asking for some direct loans for suppliers to get through the very low levels of production…We are diligently working with government to prove that the companies are viable and are simply out of cash on a temporary basis…We’re working with Natural Resources Canada on…an educational process with a relatively small amount of capital investment, whereby changing procedures you can save between five and 10 percent of your energy costs. We’re just rolling that out this summer.
MA: What is the outlook for the industry moving forward?
GF: Come the fourth quarter, production volumes will increase and we will start on the way of a very slow recovery to volumes that will allow people to be quite profitable in the longer term…We know we need to spend time and money on innovation and improving the way we do things and improving the products that we have. There is certainly a great demand for higher levels of fuel efficiency and we’re working very hard at that in terms of lightening the vehicle and new ways of doing things so that costs are reduced…We know that the low-cost countries will continue to take over the simple stuff, the stuff that ships well, so we have to move up the value chain so we’re into the more complicated products or the more complicated processes.
MA: What do you hope the automotive parts industry and research community will get out of the APMA-AUTO21 conference?
GF: First of all, as always, we have some dynamic speakers, so there’s lots of information that we’re supplying to the industry. Hopefully from that they’ll take away things that will help them run their businesses more efficiently and more cost-competitively. And secondly is getting this interaction between researchers and industry people so they’ll have a better ability to work together and make the industry stronger and more innovative.