Q&A: Auto support council's Eric Burkland describes scenario for an industry rebound
Gene Monteith |
Thursday, April 08, 2010
The pessimism that permeates news reports about Ohio's auto industry bewilders Eric Burkland. Yes, there's a lot of pain right now, he says. But given the right strategies, Ohio's auto industry is positioned to rebound as a global leader. Well known as president of the Ohio Manufacturers' Association, Burkland took on an additional role last August when Gov. Strickland appointed him co-chair of the state's new Auto Industry Support Council, a public-private partnership designed to help stabilize and grow the industry. We recently asked Burkland to update us on the council's work.
The auto industry faces a number of challenges. How did the Council decide where to start?
We began by sitting down and discussing issues with OEMs, and with suppliers, and part of the initiative is to talk to the communities affected by the recent bankruptcies and plant closures. We talked to people in state government and the federal government as well in an early fact-finding phase to try to frame up the issues we thought we could attack. (We organized) work groups of folks in government and in the private sector, labor and management. We created one work group to deal with the difficulties facing the affected communities where the bankruptcies and plant closures have happened to see if we can be of assistance to the communities and the affected families and then prepare the sites for redevelopment. Another work group was on credit -- one of the issues in the supply chain today is difficulty with accessing credit. Another work group is called the Competitiveness Work Group . . . to look to see what we can do in the future to position Ohio as the preferred site for automotive investment globally. And the final work group is on technology. One of the issues is that the automobile is an incredibly intense product, both in terms of the product itself and the sophisticated technologies that are in the production processes.
You've been working with organizations like the Center for Automotive Research at Ohio State University and MAGNET (Manufacturing Advocacy & Growth Network). Could you describe your approach to partnerships?
We have real depth in advanced materials, we just have brilliance in all kinds of materials that support manufacturing in general, but in auto manufacturing in particular, and manufacturing technologies, process technologies and process know-how, and then all the components that make up an advanced industrial economy. The problem we have with that, though, is fragmentation. We have a lot of silos and inefficiency in matching a technical or innovation need with a technical or problem solution. So, we're approaching the issue from an open-source thinking model. The attorney general is working with the university system and Procter & Gamble to develop a single technology transfer agreement with Procter & Gamble and the universities. The vision here is to use the P&G agreement as the model agreement for industry so that there's a basic approach to the treatment of intellectual property in Ohio and a company or an industry doesn't have to recreate the wheel every time. Another thing that's come out of that (is) something called the Ohio Manufacturing Institute, and they'll take the lead in cataloguing the technical assets available to manufacturing . . .in the state.
A lot of Ohio's automotive suppliers are also suppliers to growing industries like aerospace. What are some of the opportunities to help automotive manufacturers expand into some of these growing industry areas?
We want more auto production in the state, not less. So the question for Ohio is what set of strategies do we need to grow our market share in autos, and that strategy has got to be a strategy to attract research development. The ancillary benefit . . . is we have the industrial infrastructure to support other industries. So all the advanced material know-how in polymers, or metallurgy and all the production technologies, the forming, shaping and all the design capabilities that are required and to support the automotive industry are the same capabilities that can support aerospace, the white goods industry or advanced energy products.
You were quoted as saying Ohio needs to position itself as the premier hub of auto manufacturing and lead the industry transition. What does that transition look like at the end of the day?
The key is to attract investments in product research development and production. If we don't get the investments we don't get the jobs, we don't get the economic output, and we lose our competitive edge. So the real question is how do we attract the investments so there is an appropriate return for the companies? Manufacturing locates in the lowest cost environment. That doesn't mean the lowest labor cost . . . we don't want to (drive) down labor rates because that undermines prosperity. So the strategy has got to be how do we leverage all of our resources to drive down non value-added costs?
What are the next steps?
The way we've organized this council is to have as few meetings as possible and as much work done as possible by aligning the various organizations -- that's the Board of Regents, the (Department of Development), Jobs and Family Services and the companies. So the biggest next step for us is in the innovation network to try put together a more formal proposal on how to structure an Ohio manufacturing innovation network, building again on the model IP agreement and putting together the technology and governance model to support an innovation network. There's ongoing work in helping communities rebound . . . and then there's a lot of work going on with the federal government to communicate this issue of access to credit. And we've been working with a number of other states who have similar concerns.
Most of the news out there with respect to the industry seems to be gloom and doom, but I suspect you have a more optimistic view.
It's amazing the resiliency in the industry and the innovation that's going on. On one level it's just mind blowing, so I think people are going to be surprised at how we're going to rebound out of this really difficult, traumatic time. The technical know-how, the inventiveness and the optimism underneath all the pain is just incredible. And in Ohio, we love manufacturing, we're really good at that. If we can get the economy going and the demand back, we're going to be in a good place in Ohio.