By Joe Giacomin, Managing Director, Automotive

(248) 453-0092 | jgiacomin@asgteam.com

Automotive Suppliers: The Road Ahead

As a person who has worked closely with OEM auto suppliers for quite some time, I have become accustomed to their many challenges. These difficulties include lengthy sales cycles, recessions, competitive threats, price squeezes, and supply shortages. More recently, OEM auto suppliers also faced financial pressures from the acceleration of electric vehicles, the chip crisis, and the current tariff situation, which seems to be creating a variety of questions.

When one or more of these roadblocks occur, in my experience, there can be a tendency to put on the brakes and hold on for dear life. The situation is compounded simply because automotive suppliers, by the very nature of their business, may be deriving a major portion of their revenue from a limited number of customers, maybe even one or two.

Invariably, once the storm has passed and key decision makers begin to exit their bunkers, there is typically a mad scramble to make up time and resume a more spirited level of business activity.

Accompanying this resurgence generally calls for the addition of key people who can get the company where it needs to go.

The problem? Every other supplier is in the same boat – attempting to jump-start their business and compete for a limited pool of talent.

Then the price war begins –crazy compensation numbers are introduced while job candidates go on a “binge” of sorts, moving short-term from company to company. It can become career-altering for job candidates and hugely unproductive (and unprofitable) for employers.

Acquiring key impact players in anticipation of the roadblocks and to advance your company ahead of the pack is a key strategy to think about.

Top talent will assist in developing new customers, new markets, product refinement/diversification, cost alignment, and improving logistics.

It reminds me of the story about a famous consumer product company that for generations produced baking soda for homemakers who used it regularly, producing delicious confections in their kitchens — from scratch. We know what happened there.

People no longer had the luxury of time, and it ultimately became less expensive to purchase quality baked goods at the local grocery or specialty bake shop than to spend time and money doing it yourself.

So, what did those whiz-kids at Arm & Hammer Baking Soda do when their sales dropped through the floor? The company began marketing their age-old product for a variety of household requirements, as well as the occasional baking ingredient.

You could brush your teeth with baking soda, place it in your refrigerator as an odor reducer, use it as a cleaning agent or facial scrub, and even soothe insect bites. There are virtually dozens of practical uses for baking soda. And, for the grand finale, when you’re ready to

dispose of it, you can place it into your kitchen drain – add vinegar and watch it fizz away as it cleans and deodorizes the pipes.

Granted, if you’re manufacturing wheel bearings, electrical systems, or door panels, diversification may be a bit more complex, but the theory is the same –a new customer, a new product category, or sales territory, can all work wonders.

When the situation is critical, it’s better to be creative, outflank the current market conditions, get out in front of the situation, and lead. You may have some fun, too!

Acquiring A Winner

The ability to pick winners and losers 60% of the time is considered quite good. Being correct beyond 80% with any consistency…well, now we’re talking legendary.

As I write this article, we are approaching the finals of the “March Madness” college basketball tournament – arguably one of the most (if not THE most) challenging in sports to pick correctly.

March Madness got me to thinking about the talent acquisition process, how a company evaluates job candidates, and the variety of procedures they deploy to determine who will be a successful hire.

I happened to pick up a biography at our local library this week about the late great singer-songwriter, Buddy Holly. It struck a chord as I read about his difficult journey to stardom and reminded me of the similarities hiring authorities face when considering a job candidate.

In the case of Buddy Holly, one major record executive after another had an opportunity to sign him and declined. Each record label official justified their decision to pass based upon a variation of business “logic”.

None, except for the company which ultimately (with considerable foresight) took a chance, envisioned Buddy Holly becoming a chart-busting recording artist. In their minds, they were thinking: “That’ll be the day”.

As I conduct search assignments on behalf of our client companies, I have a front row seat observing the broad selection of screening methods key executives, along with staff members, use to determine which job candidate will be a positive addition.

Sure, there are some obvious “price of entry” general qualifications a person should have to be considered…and simply identifying a potential candidate using available technology can be relatively easy-peasy.

Now the fun begins.

The hiring process has become highly sophisticated, accompanied by valuable tools available to assist in the decision.

So, you have zoomed in on a candidate that is a “widget expert”, has a solid education, work history, references, and even did well on the intelligence and psychological tests you subjected the person to.

And let’s not discount the three, four, or more virtual and in-person meetings. But will he/she be successful?

Call it experience, street smarts, a sixth sense, or more commonly, the gut factor. It is one area that technology, hiring “committees,” and the latest artificial intelligence will never replace.

The job candidate who has moved through the hoops will still have to show up and perform, interact with contemporaries, superiors, factory personnel, and, of course, customers.

The multitude of valuable hiring tools and staff, while helpful, won’t replace having an individual who knows how to win… closely involved in the decision. It’s that final, visionary feeling that just can’t be packaged.

The multitude of valuable hiring tools and staff, while helpful, won’t replace having an individual who knows how to win.

Call it old-fashioned, but a person who has been there many times can typically smell success. If you are associated with her/him, congratulations.

And who knows—you might just wind up in the top 40, well on your way to #1.