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Thursday, 23 October 2014 07:50

Q&A: Dennis Cuneo, Former Senior Vice President, Toyota North America

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Dennis Cuneo Dennis Cuneo COURTESY PHOTO

As a former executive at Toyota, Dennis Cuneo has firsthand experience in the intricacies of the automotive industry supply chain in North America. He started with the company in 1984 and later became senior vice president in 2001, overseeing the expansion of Toyota’s manufacturing operations. Currently, Cuneo serves on the boards of AK Steel Holding Corp. and BorgWarner Inc., as well as runs his own consulting firm that specializes in site selection for companies and economic development agencies. Prior to an Oct. 27 talk hosted by Lakeshore Advantage at the MSU Bioeconomy Institute in Holland, Cuneo spoke with MiBiz about the future of the expanding automotive industry, technology and its impact on West Michigan suppliers.

While the vice president of Toyota North America, what were your key takeaways on automotive suppliers and their impact on communities?

Both have to learn to adapt and recognize that change happens and is going to come. When you have situations where an existing company that’s family owned is purchased and expands for a while, then spins off and disinvests in that area, well, the town now has a sufficient skilled workforce and can attract other kinds of suppliers in that industry.

There are countless examples of suppliers in West Michigan that have grown from small family-owned operations to be part of much larger firms or public companies. How does that impact the community?

What you’re seeing is typical of almost all industries. Some of these trends could work in a negative way and some could work in a positive way. One that’s working positively for Holland is because of the pressing fuel economy regulations, you’re seeing a growing electrification of vehicles. You have two batteries operations in Holland that — even though they have had some fits and starts — look like they are on track now. The key is to have the right kind of business climate and skills so that you can attract new business.

What’s the most pertinent trend auto suppliers need to pay attention to right now?

In the next 10 years, the biggest single impact to the North American auto industry is going to be the new fuel economy regulations. Currently, the industry is at 24.1 miles per gallon and it has to get to 54.5 in 2025. That’s two model cycles. There is a lot of pressure in improving traditional powertrains, moving toward alternative powertrains and lightweight materials. That trend is real and is significant.

Part of your talk is focused on automated cars. How do you see the role of technology changing the industry?

I think we’ll see a truly self-driving car. It might be as soon as 15 years from now or as long as 40, but a significant level of vehicles will be autonomous. The technology is already there. The software just needs to be developed a little bit more. The biggest hurdles are going to be legal and regulatory, not technology.

How do you see that technology affecting suppliers?

The whole industry is switching from mechanical to software-based. Somewhere around 35 percent of a vehicle cost now is based on electronics and software. There are a lot of openings at small startup technology-based firms because the OEMs are looking for software talent. There’s opportunity there and (that’s) something that you might see more and more of in West Michigan. Michigan itself is still the center of automotive engineering and that is a big driver. There are smart individuals that see a need in software or somewhere else in the auto supply chain and they could eventually be the next (Johnson Controls Inc.) — starting off small then getting bigger and bigger.

What do you see as the biggest challenge for smaller suppliers moving forward?

It’s keeping up with technology changes and being able to take advantage of them and move quickly. We’re probably in a period of disruption in the auto industry that we haven’t seen since the beginning with the combination of the fuel economy regulations and new technology like vehicle electrification and automation all coming together.

Interview conducted and condensed by John Wiegand.

Read 2466 times Last modified on Thursday, 23 October 2014 08:15

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