We May Arm-wrestle Over Means, But Goals Are Easy To Support

Motor & Equipment Manufacturers Association (MEMA) is the trade association for motor vehicles, mobility suppliers, parts manufacturers and remanufacturers. It acts as the voice of the motor vehicle and mobility supplier industry, the largest manufacturing sector in the United States. MEMA has more than 1,000 members who manufacture motor vehicle components and systems for the original equipment and aftermarket segments of the light vehicle and heavy-duty industries. They provide over two-thirds of the value of a new vehicle, directly support more than 871,000 jobs and contribute nearly three percent to the US GDP of $435 billion. The industry that MEMA represents has been facing threats from international free trade. “We are fully aligned with the Trump administration’s goals to make American businesses stronger and to grow jobs. We may arm-wrestle over the best way to get there, but the underlying goals are easy to support,” Bill Long, President and Chief Executive Officer of MEMA, told T Murrali of AutoParts Asia in an exclusive interview. Edited excerpts:

Q: Congratulations on becoming the President and CEO of MEMA. What are your immediate priorities?

Long: First let me say, I’m extremely proud to take the helm of MEMA at this critical time in our history, and I am grateful to the MEMA Board and our members for the opportunity to serve them at this level.
Through MEMA’s divisions – the Automotive Aftermarket Suppliers Association, the Heavy Duty Manufacturers Association, MERA – The Association for Sustainable Manufacturing and the Original Equipment Suppliers Association — we represent 1,000 US companies that manufacture original and aftermarket parts and components for motor vehicles. It is important to note that parts suppliers represent the largest sector of manufacturing jobs in the United States and are an important part of the US economy. Suppliers’ importance to the global economy is increasing as well, reflecting the growth in the world’s vehicle population. Between 2007 and 2017, as the world’s population grew by 717 million people, the number of passenger cars in operation increased by 375 million to 1.2 billion, a compounded annual growth rate (CAGR) of four percent.

Most consumers are not aware that about 77 percent of the value of a new vehicle is created by parts suppliers – – everything from sensors and computers to the lightweight materials that enable safer, more fuel efficient and lower-emission vehicles. Technologies that were just a dream a few years ago are now available and in use on roads, due mainly to suppliers who applied their investments, resources, engineering and creativity into innovating these advanced technologies.

I believe MEMA is uniquely positioned within the supplier industry due to its broad peripheral view of all the market segments that allow us to recognise trends, opportunities and potential risks, bringing clarity to the broad range of possibilities.

It is critical that we continue to strengthen the voice of the supplier industry in Washington, D.C. and the states, and share our story of how suppliers are driving technology, growing jobs and playing a vital role in the US economy. Now more than ever, it is important that suppliers’ collective voice be clear and strong about our accomplishments and our contributions. We are doing that every day in Washington and it will be our top priority to build on that momentum. The success of our industry depends on a strong, functioning global supply chain.

Q: MEMA serves as the voice of the motor vehicle and mobility supplier industry. What are the challenges?

Long: Motor vehicle component suppliers are facing unprecedented changes, challenges and opportunities like advances in connected and automated technologies; changes in consumer demands; and legislative, regulatory and commercial uncertainties. Suppliers are experiencing and driving transformational advances in vehicle technology while adapting to tectonic shifts in the global marketplace. In our industry’s long history, we have tackled challenges before, and we will do it again now.

MEMA has established a clear and focused plan for advocating on behalf of its members and advancing their business interests. We have a wide range of advocacy initiatives, but there are overarching priorities that serve as a unifying thread through all of our efforts.

While trade issues remain a top focus for the supplier industry, other priorities of MEMA include vehicle safety and automated technologies, fuel economy and emission standards, and infrastructure in what is truly a global industry.
Swift changes in the international trade environment are affecting our member companies. These changes include the imposition or threat of tariffs on a wide range of products and materials, such as steel and aluminum, and imports from China, motor vehicles and motor vehicle parts. (They also include the North American trade deal, now known as the United States-Mexico-Canada Agreement (USMCA). The success of the overall vehicle industry and the continued employment of hundreds of thousands of Americans depend on a strong and functioning North American supply chain. MEMA was pleased that USMCA remained a three-party pact when it was signed on November 30, 2018.

MEMA advocates for policies that foster strong economic growth for motor vehicle component manufacturers and remanufacturers. Our message to the elected officials, Government agencies and the motoring public is clear: motor vehicle parts manufacturers are an engine for economic vitality worldwide. Suppliers have a powerful voice in Washington, and Washington is listening.

Q: The industry you represent has been facing threats from international free trade. Can you explain the current challenges on this front?

Long: We are fully aligned with the Trump administration’s goals to make American businesses stronger and to grow jobs. We may arm- wrestle over the best way to get there, but the underlying goals are easy to support.
That said, we do need to make sure that the proposed and adapted remedies recognise the nature and complexity of the industry’s global supply chain to actually help accomplish the goals.
International trade has been made more complicated and difficult through the application of tariffs on steel and aluminum and on a wide range of products and inputs from China. In addition, the administration may also impose tariffs on automobiles and auto parts.

As you can imagine, this generates the uncertainty I mentioned. Given that Tier-1 parts suppliers often provide quotes on new vehicle production three and five years in advance, it is difficult for them to predict and prepare for fluctuations in the trade environment. This put investments and jobs at risk.

MEMA has been taking this message to the administration and Congress.

Q: MEMA acknowledges it is earning a seat at the table in the Trump administration that made it emerge as a consistent and trusted voice in the national conversation on the issues that affect MEMA’s division members. Can you elaborate on how this has helped MEMA and its members so far?

Long: Two years into the Trump administration, we are experiencing a new crop of agency heads and advisors to the president while Capitol Hill simmers with a divided Congress and a congressional freshman class with more than 100 new members.

This change affects motor vehicle parts suppliers directly: the top 10 US States with supplier industries have roughly a quarter of the freshmen, with 25 new House and Senate members representing 67 percent of supplier employment. These new faces in Washington are expected to bring significant shifts in public policy.

Our message to legislators and regulators is clear: vehicle parts manufacturers are the largest employer of manufacturing jobs in the US, directly employing more than 871,000 Americans. Motor vehicle parts manufacturing is an engine of economic vitality, generating nearly three percent of the US gross domestic product. That message gets attention in Washington. As an association, we are stronger together. Our message on behalf of members is being heard. Having that kind of influence is invaluable to our members.

Q: Globally the automotive industry has been facing several disruptive technologies and the emergence of electric and autonomous vehicles. These disruptions make decision-making, especially on investments, very challenging due to perceived inconsistency in prospects and business sustainability. What are the challenges ahead for your members because of the disruptive technologies?

Long: In reality, our members are creating the technologies that will begin to change the driving experience as a whole. Advances in the next generation of advanced driver assistance systems (ADAS) technologies are critically important to reducing fatalities and injuries by preventing and mitigating vehicle crashes. MEMA’s landmark study with Boston Consulting Group, “A Roadmap to Safer Driving,” estimates ADAS could help avoid approximately 28 percent of all motor vehicle crashes in the United States and prevent about 9,900 fatalities per year.

In addition, ADAS technologies serve as building block technologies for higher levels of automation. Development and eventual deployment of highly automated vehicle technologies will expand mobility options for persons with disabilities, seniors, and those who require access to more affordable transportation. Also, significant decreases in collisions will mean fewer roadway backups – reducing congestion and vehicle emissions – and diminish overall societal costs.
Traffic jams and congestion, wasteful waits at traffic lights, and delays due to road hazards will all but come to an end. We will see a reduction in the emissions resulting from traffic delays, and the societal cost of repairing damaged vehicles. These technologies will also improve transportation efficiencies in ways that benefit us all.

Of course, taking advantage of these technologies means more than putting parts on cars. MEMA continues to support 5.9 GHz Vehicle-to-Vehicle and Vehicle-to-Everything Communication as an important step in improving vehicle safety. These V2V and V2X systems have tremendous potential, so it is important to keep the 5.9 GHz radio spectrum allocated for automotive safety.

Fuel-saving technologies, such as downsized engines with turbo charging, continuously variable valve duration and cylinder deactivation will continue to be a topic of importance. Another innovation to look for is the electrification of components like pumps and valve trains that will also reduce fuel consumption. Suppliers also are working with OEMs to develop full battery electric vehicles that have zero emissions.
Yes, there are challenges ahead, but our industry is well-prepared to meet those challenges. We are not chasing change. We are on the crest of the wave.

Q: Some time ago MEMA joined a strategic partnership to address cybersecurity risks associated with connected and automated vehicles. Can you update us on the progress?

Long: MEMA is a strategic partner of the Automotive Information Sharing and Analysis Center (Auto-ISAC). The Auto-ISAC is a non-profit organisation that facilitates the trusted sharing of cybersecurity information and leads the development of vehicle cybersecurity best practices for the automotive industry. Its sharing model helps automakers and suppliers more effectively counter cyber threats and develop safeguards for vehicle electronic systems and networks by fostering industry collaboration on best practice guidelines for cybersecurity, evolving developments in the design and engineering of components and integrated vehicle systems, and responses to cyber-attacks.
Vehicles are benefiting from a wave of technology innovations, producing transportation that is safer, cleaner and smarter thanks mainly to automotive and information systems that provide more connectivity. The very technology that provides us with these new efficiencies also introduces cyber risk to the vehicle, which is why the industry is proactively addressing this issue as a critical focus.

MEMA and its supplier members, as well as automakers and commercial vehicle companies are committed to strong cybersecurity protections in these systems, and are taking many actions, including implementing security features in every stage of the vehicle lifecycle.

Q: What is in store for MEMA and its supplier members?

Long: MEMA is focused on a clear mission to advance the business interests of its members, and a vision of strengthening motor vehicle suppliers as a high-growth, high-profit and influential industry.
We have identified three critical areas of strategic importance that shape our initiatives:
• Be a relevant force and resource on advanced vehicle technologies
• Pursue an active international role
• Elevate MEMA’s presence and influence in Washington, D.C.
We are ready to address the future – be it regulatory or legislative change; new and evolving business models; the transformation in vehicle technology. With challenge and change comes great opportunity. We see nothing but growth and opportunity ahead.

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