American Axle founder urges manufacturers to think about the future

September 20, 2012

U.S. manufacturing needs to stop seeing the past through rose-tinted glasses and start looking to the future, believes the founder of American Axle.

In a speech made to 250 members of the Detroit Economic Club on September 19, Richard Dauch outlined the business strategy that manufacturers need to implement in their industries to "adjust to the global economies." According to the Detroit Free Press, Dauch, a notoriously outspoken auto supplier who founded the company in 1994, claimed most Americans weren't aware of the key role that manufacturing plays in the U.S. economy and that the country's 13th place ranking in worldwide exports was "pathetic."

"Manufacturing today, as in the past and should remain in the future, is a critical engine in America," said Dauch. "We need a prosperous, competitive manufacturing base. China, Korea and others, they're using the American playbook, and we're letting them do it."

Figures cited by the Detroit-based businessman highlighted that U.S. manufacturing provides work for 12 million people, 12 percent of U.S. GDP and that 50 percent of all research and development in the country is done by manufacturers. Using the auto industry as an example, Dauch stated that while making cars was an established part of U.S. manufacturing strategy, 80 percent of people in the industry have no manufacturing experience and that suppliers should be looking to take advantage of turmoil in other countries to expand their market.

"Europe's auto sector is in deep, deep trouble," he said. "The restructuring hasn't even approached 20 percent of what has to be done in Europe. As far as I'm concerned, they're not doing enough. They need to do a whole lot more faster, quicker, deeper, wider."

According to Reuters, the company has already been active in Europe, paying $4 million to buy Saab Automobile out of a joint venture that was intended to design electric all-wheel drive systems that boost fuel efficiency, an example "of the kinds of acquisitions that American Axle might seek in the future."

Dauch, whose speech was called "inspiring" by one attendee, believes that U.S. manufacturing can strengthen in three areas. Acknowledging that the last few years had been a "roller-coaster," manufacturers should "quit living in yesteryear."

"Expand global markets, become innovators and develop and nurture your talent," he said. "We can and should return to an era of prosperity."