The perspectives were far from uniform. They ranged from Linamar chief executive officer Linda Hasenfratz describing it as “the most exciting time in history to be an auto parts supplier,” because “every new platform means a new opportunity to win a new piece of business,” to the heads of some smaller companies complaining that the automakers are making unreasonable demands and pursuing unrealistic production goals.
They also invoked a convergence of factors that will make for a very bumpy road for at least the next few years. Relationships with automakers are being redrawn, as new players enter the market and more established ones reassess supply arrangements. Uncertainties around rollouts of new vehicles, consumer demand and fast-evolving technologies are complicating decisions about capital investments. An accelerated shift toward automation is changing the nature of the workplace.
From left, mold Makers Kevin Blundell and Ed Cipkar working on small molds at Integrity Tool & Mold in Oldcastle, Ont.Inside Integrity's 4000 ton Krause Maffei mold-cutting machine during operation. Integrity is one of the top North American companies in making machinery for manufacturing.“We generally don’t invest in special-purpose equipment,” Ms. Hasenfratz says.
It also reflects uncertainty about which type of non-emitting vehicles will eventually dominate the market – whether batteries could prove a bridge to hydrogen fuel cells, for instance, which Ms. Hasenfratz believes is a strong possibility – and thus trying to develop things that are geared or adaptable to every outcome.
But a second form of risk mitigation is increasingly an imperative for the more specialized companies alongside the behemoths. It involves figuring out which of the new EV makers challenging the established auto giants to seek business from, during what might prove akin to a tech bubble.As president of Circle 5, one of the many companies clustered in Windsor that make equipment for production lines, Saylo Lam is embracing a new dimension of his job as more players enter the automaking field.
Suppliers have been given pause by the failures of seemingly promising early-stage companies, such as Ohio-based Lordstown Motors, which filed for bankruptcy protection in June 2023.But Tesla is currently an exception that has established its ability to make and sell its product. Suppliers have been given pause by the failures of other, seemingly promising early-stage companies – the recent bankruptcy of the Ohio-based electric truck maker Lordstown Motors Corp. being one oft-cited example.