Problems will spur strength, expert says

11/9/2006

BOWLING GREEN - In 10 or 15 years, the North American auto industry will realize this era was the zenith of drastic change, with automakers and parts suppliers scrambling to become profitable and survive, a leading expert says.

Toledo's Dana Corp. will be among the successes, David Cole said here last night, although the parts maker is likely to be much smaller - and leaner - when it emerges from Chapter 11 bankruptcy protection.

"Dana's a very competent company. It will survive this. It'll come through," added the chairman of the Center for Automotive Research in Ann Arbor.

Mr. Cole addressed about 125 people as the keynote speaker for the 15th annual Canada-Ohio Business Dinner at Bowling Green State University, sponsored by BGSU's Canadian Studies Center. "The relationship between Canada and the U.S. is really a model for relationships across borders around the world," he said.

Mr. Cole said competition from foreign firms and high worker benefit costs are among factors plaguing the Big Three and North American suppliers, but the situation also is triggering aggressive and necessary moves.

He noted that General Motors Corp., for example, is trimming its hourly workforce this year with buyout offers, part of a push to cut fixed costs by $9 billion by the end of this year. That will decrease its cost disadvantage with transplant automakers from roughly $2,500 a vehicle to $500, he said.

He also cited DaimlerChrysler AG's recently opened multifactory Jeep Wrangler plant in Toledo, where suppliers run some of the factories.

Continuing to improve productivity is important to keeping manufacturing from going overseas, but better education is needed for the thousands of jobs that will be created in the North American auto industry, Mr. Cole said.

"There are going to be no jobs for high school dropouts."

Contact Julie M. McKinnon at:

jmckinnon@theblade.com

or 419-724-6087.