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STOP TALK The next decade promises to be a disruptive one for automotive suppliers. Analysts say a host of factors now are conspiring to create uncertainty and increased risks as vehicle sales plateau and game-changing technologies and services—including increased electrification, automation and shared transporta- tion—prepare to take hold. At the same time, the traditional multi-tiered supply chain is evolving with automakers pulling more work in-house while asking some first-tier suppliers to become systems integrators and going around others to deal directly with sub-tier vendors. "Everything is being questioned now," asserts David Andrea, executive vice president of research of the Center for Automotive Research ( cargroup.org ). He points to recent events such as General Motors selling its Opel operations in Europe to PSA Group; GM, Ford and Toyota ending production in Australia; and Delphi spinning off its powertrain business as the start of a new normal in which longtime legacy operations are quickly overhauled or aban- doned altogether. Complicating matters are uncertainties about pending regulations, such as the future of America's plan to hike fuel economy requirements to 54.5 mpg by 2025 and the consequences of the Trump Administration's decision to pull the U.S. out of the 2015 Paris climate accord that had been signed by more than 170 nations. Tax reforms and evolving trade agreements (Brexit, NAFTA and the Trans- Pacific Partnership) further muddy the waters. Suppliers have long had to deal with rollercoaster market cycles and ongoing quality and cost demands along with changing regulations, product development pressures and other competitive forces. But the magnitude, breadth, speed and uncertainty has reached new heights—and continues to climb. As a result, some companies are creating dual strategies for what's becoming separate but connected businesses. Suppliers need to develop products and services for next-generation advanced mobility systems while continuing to nurture STEVE PLUMB, Senior Editor, AutoBeat Daily current products, which, analysts note, keep companies afloat and fund advanced development projects and strategic investments. Bosch and other mega-suppliers already are making the tran- sition. "In the past five years, we've begun the shift from being a product-based company with a 130-year history into a digital company with connected services built on a strong sensor platform," says Mike Mansuetti, who heads the company's North American operations. "We're finding we need to operate at two speeds. Our product business needs to be very careful in innovating and development," Mansuetti says, noting this requires a mistake- free mindset to planning and execution. Bosch's emerging e-mobility businesses, meanwhile, need to operate with greater agility and connectivity, according to Mansuetti, who describes the model as being a risk-tolerant, venture capitalist-type approach to pitching new ideas and learning from mistakes. ZF Friedrichshafen also is working to balance new world products with its traditional driveline business. In its 2013 stra- tegic business plan, the company correctly identified emerging megatrends such as automated driving and e-mobility systems. But it underestimated how fast things were changing, CEO Stefan Sommer concedes. Things ZF anticipated being intro- duced in 2025 such as hands-off autonomous vehicles, he notes, now are due by early next decade. In addition to a host of strategic investments, ZF is forming flexible partnerships with other top-tier suppliers to better prepare for the future. In June, ZF announced a nonexclusive partnership with Hella to develop sensors and systems for driver aid features and autonomous vehicles. This follows an "advanced engineering" alliance earlier this year with French interiors giant Faurecia to develop a cockpit of the future to addresses the various interior configurations and occupant positions that could occur within autonomous vehicles. "Companies need to capitalize on market conditions as they exist," advises Mike Jackson of the Original Equipment Suppliers Association. "In the end, success still comes down to providing value and the strength of a supplier's relationship with its customers." "In the end, success still comes down to providing value and the strength of a supplier's relationship with its customers." Full Speeds Ahead for Disruptive Suppliers With more than 25 years of experience, Steve Plumb has covered every aspect of the auto industry as an industry writer, editor and marketing professional. He was the founding editor of AutoTech Daily and rejoined the AutoBeat team in 2015. He previously was the editorial director for a leading public relations company. 56