“Survival of the Fittest”
In the May 1, 2011 issue of Industry Week, Booz & Company Partner Scott Corwin (North America) said that findings of a recent Booz & Company survey of North American car makers and original equipment manufacturers (OEMs) reflect “a certain realism about the challenges” ahead for the industry. In the Booz & Company survey of more than 200 executives from U.S.-based automotive OEMs and suppliers, some two-thirds surveyed asserted that the restructuring efforts undertaken by OEMs and suppliers during the recession did not go far enough to address the industry’s vulnerabilities. And with the vast majority of the executives saying the current state of the U.S. auto industry is about the same as or only somewhat better than it was in January 2009, Booz & Company offered a number of recommendations. Those started with the need to “create portfolios and development systems that produce a positive return on investment for all vehicles”— while continuing to lower material and structural costs. “It is one of the most heavily competed automotive markets in the world,” said Corwin. “It historically has been a very profitable market, and I think it’s going to be a fight every single day for these manufacturers. No one can rest on their laurels.”