>> THE AUTOMOTIVE INDUSTRY IS RECOVERING FROM THE IMPACTS OF THE CORONAVIRUS PANDEMIC.

WE BREAK DOWN THE FORECAST WITH THE INJECTION OF STIMULS MONEY INTO THE ECONOMY AND COVID-19 VACCINATIONS INCREASING.

BIG PICTURE.

THE COMMIT TO ELECTIFICATION.

WEST MICHIGAN PARTS SUPPLIERS AND CONSUMER COMMISSION PREPARE FOR THE NEXT GENERATION AUTOMOBILE.

WE TAKE A CLOSER LOOK ON "WEST MICHIGAN WEEK."

THANK YOU FOR JOINING US ON "WEST MICHIGAN WEEK."

THE AUTOMOTIVE INDUSTRY IN PARTICULAR, MICHIGAN'S BIG THREE AUTOMAKERS IN THE HEADLINES RECENTLY, INCLUDE GETTING INVOLVED INTO NATIONAL POLITICS, HERE TO DISCUSS THE INDUSTRY AND WEST MICHIGAN'S AUTOMOTIVE PARTS SUPPLIERS IS ADAM WALL, THANK YOU FOR JOINING US.

>> YOU BET.

THANK YOU!

>> WE'LL GET TO THE POLITICS IN A MINUTE.

BUT I TOUCHED BASE WITH YOU BACK IN JANUARYAS GENERAL MOTORS WAS PREPARING A SUPER BOWL AD TRUMPETING ELECTRIFICATION OF THE FLEET.

IT WAS A FUNNY SPOT.

BUT THAT JUST GOT I THINK THE COUNTRY THINKING, AND GENERAL MOTORS AND THE OTHER COMPANIES PREPARING THE CONSUMER FOR EVs.

>> IT REALLY WAS, IT WAS THE APPETIZER.

FOR THE MAIN COURSE, WHICH IS GOING TO BE A DELUGE OF EV'S DOWN THE PIKE OVER THE NEXT 12 TO 36 MONTHS.

IT'S GOING TO BE -- THERE ARE GOING TO BE -- THERE WILL BE AN EV FOR EVERY GARAGE IN EVERY SIZE AND SHAPE YOU CAN IMAGINE WHETHER PICKUP TRUCKS, UTILITY VEHICLES OR TRADITIONAL PASSENGER CARS, MAINSTREAM VEHICLES TOO, NOT JUST LUXURY VEHICLES.

GENERAL MOTORS IS VERY MUCH OUT IN FRONT WITH THIS WITH THE LINEUP THAT THEY'RE PLANNING.

>> YOU KNOW, I WOULD RUN INTO YOU IN DETROIT AT THE NORTH AMERICAN INTERNATIONAL AUTO SHOW.

YOU'RE HERE IN TOWN FOR THE AUTOMOTIVE SYMPOSIUM WHICH IS HELD IN LATE WINTER/EARLY SPRING.

WHY NOW?

YOU AND I HAVE HAD DISCUSSIONS ABOUT LITHIUM-ION BATTERIES AND HYDROGEN FOR YEARS.

WHAT MAKES NOW DIFFERENT FROM THE PAST?

>> THERE ARE A FEW REASONS, IT'S A GOOD QUESTION BECAUSE YOU'RE RIGHT, WE'VE BEEN TALKING ABOUT THIS FOR YEARS, AND IT DOES LEAD ONE TO SAY WHAT'S DIFFERENT NOW VERSUS THREE, FOUR, FIVE YEARS AGO?

TECHNOLOGY HAS EVOLVED.

WE HAVE SEEN SOME PRETTY MASSIVE IMPROVEMENTS ON BATTERY, TECHNOLOGY, POWER ELECTRONICS, THINGS GOING INTO THE ELECTRIFIED VEHICLES, MORE IMPORTANTLY TOO, THE CLIMATE IN GENERAL IS SHIFTING TOWARDS A MRE ELECTRIFIED ENVIRONMENT.

WE SEE IT IN EUROPE AND CHINA, TO A SIGNIFICANT STEP.

THOSE ARE LARGELY CERTAINLY DRIVEN IN PART BY GOVERNMENT REGULATIONS AND EMISSIONS REQUIREMENTS AND FRANKLY IN THE U.S. WE'RE STARTING TO MOVE TOWARDS THAT DIRECTION AS WELL.

THE NEW ADMINISTRATION HAS BEEN VERY OUT-FRONT IN TERMS OF LOOKING TO SHIFT US AWAY FROM FOSSIL FUEL USAGE IN PASSENGER VEHICLES AND EMISSIONS, AND AGAIN, THIS IS ANOTHER MANIFESTATION OF THAT, AND THE AUTOMAKERS DON'T WANT TO BE LEFT BEHIND IN THIS.

YES, THERE IS A CORE FOUNDATIONAL BUSINESS THAT'S INTERNAL COMBUSTION, THAT WILL BE THERE FOR A WHILE YET, TO BE SURE, BUT THERE'S A WHOLE HOST OF OTHER NEW DEMAND OUT THERE, AND CERTAINLY THAT'S THE DIRECTION DEMAND WILL LIKELY BE GOING IN THE INTERMEDIATE TO LONGER TERM ESPECIALLY.

>> SO NOT LIKE THE DENIM JEAN INDUSTRY RIGHT NOW WITH THE LOOSER, HIGHER-WAIST JEANS, THERE THEY ARE ON THE SHELF, THAT'S IT.

THERE'S STILL GOING TO BE THAT TRANSPORTATION WE'RE GOING TO SEE?

>> NO MOM JEANS IN HERE!

>> ALL RIGHT, GOOD.

>> YOU'RE RIGHT, THERE WILL BE -- YOU'RE RIGHT, INTERNAL COMBUSTION, I DON'T WANT TO GIVE ANYBODY THE IMPRESSION NEXT YEAR OR NEXT WEEK, THE V-8 IS MOVING TO FOUR CYLINDERS AND THE LIKE, WHILE THAT'S HAPPENING, YOU WILL DEFINITELY BE SEEING MORE AND MORE ELECTRIC VEHICLES.

IT IS GOING TO, I THINK, START TO CALL IT FORCE OR ENCOURAGE PEOPLE TO THINK ABOUT WHAT DO I DO?

DO I WANT TO GET A CHARGING STATION IN MY HOUSE?

WHAT WILL CONSUMER'S ENERGY DO FOR ME TO HELP INFLUENCE OR INCENTIVIZE THAT?

OR THE OTHER LOCAL UTILITY ON THAT FOR MAYBE AUTOMAKERS HELPING ON THAT END AS WELL, FOR YOUR OWN CHARGING INFRASTRUCTURE AS IT WERE, AND AGAIN, TRYING TO THINK HOW THE EV MIGHT FIT INTO THE LIFESTYLE AND MAYBE FEWER COMPROMISES AS WELL.

FOR THE AUTOMAKERS THEMSELVES, IT'S GOING TO BE ALL ABOUT REMOVING OBJECTIONS FROM THE CONSUMER.

BECAUSE RIGHT NOW THERE ARE OBJECTIONS, HOW FAR CAN I GO ON THIS BATTERY CHARGE?

WHAT WILL IT DO IN THE COLD WEATHER VERSUS THE HOT WEATHER?

WILL I LOSE RANGE, IF YOU WILL?

WHERE CAN I CHARGE IT OUTSIDE OF MY HOUSE?

ALL OF THOSE THINGS, AND THEN THE COST, AS THE COST COMES DOWN AND THE OTHER FEATURES ARE TOUTED AS WELL, THAT WILL HELP WITH THE ADOPTION CURVE AS WELL.

>> DO YOU THINK THERE IS A CONSUMER FAMILIARITY OUT THERE?

WE ALL HAVE A CELL PHONE, WE KNOW WE CHARGE THOSE BATTERIES, IN THE PAST YEAR FOR MYSELF, AND I'M JUST SPEAKING FOR MYSELF.

I PURCHASED A BATTERY-OPERATED CHAINSAW, AND I WAS HESITANT AT FIRST, BUT I STARTED USING IT, WOW, THIS IS AMAZING, I'M NOT DEALING WITH OIL AND GAS AND THE MIXING OF ALL THAT, AND THE SNOW BLOWER CAME ALONG, I NEEDED A NEW ONE, THE SUCCESS WITH THE CHAINSAW, LET'S DO THIS HERE.

I HAVE A FAMILIARITY WITH HOW IT WORKS AND I SEE THE BENEFITS OF IT.

>> THERE IS A FAMILIARITY THAT IS BRED BY THIS, AND IT IS BORN IN US, WHETHER IT IS OUR PHONE OR THE HOUSEHOLD TOOLS, ABSOLUTELY.

WHETHER IT BE A CHAIN SAW EVEN OR AN EDGEER OR WEED WHACKER, IT'S PART OF THE LEXICON IN OUR THINKING.

IT'S NOT A FAR STRETCH.

IT MAY SOUND WEIRD IN SOME WAYS BUT IT REALLY ISN'T, AND WHAT YOU'RE SEEING ON THE PART OF AUTOMAKERS, TESLA AND GENERAL MOTORS WITH THE CHEVY BOLT STARTED THE PROCESSING WITH THE NISSAN LEAF OUT THERE AND OTHERS, BUT THEY HAVE STARTED THAT PROCESS IN TRYING TO COMMERCIALIZE AND PRODUCTIZING THAT FOR AUTOMOTIVE, AND AGAIN, WE'RE ONLY ON THE CUSP.

MORE TO COME.

THE MUSTANG MACH-E IS OUT THERE.

THE HUMMER EV WILL BE HITTING THE MARKET LATE THIS YEAR, WE'RE HITTING THE MARKET IN THE HIGH-PROFILE VEHICLE SEGMENTS THAT CONSUMERS ALREADY KNOW AND LOVE.

THAT HELPS AS WELL.

>> THE IMPORTANCE OF RANGE, AND YOU TALKED ABOUT THE HUMMER HERE, BUT JUST THAT WHOLE CATEGORY OF SUV AND UTILITY.

AND MAKING SURE THAT IT CAN PERFORM AND HAVE THAT RANGE THAT MOST EVERYBODY WANTS.

THAT SEEMS TO BE THE SWEET SPOT HERE.

>> RANGE IS DARN NEAR EVERYTHING.

PRICING AND COST IS OBVIOUSLY A FACTOR, BUT RANGE -- AND RANGE IS AN INTERESTING DISCUSSION BECAUSE YOU WILL HEAR OF REPORTS, THE AVERAGE U.S. CONSUMER ONLY DRIVES 20 MILES A DAY, GOING TO AND FROM WORK, RANGE MAY NOT BE THAT BIG OF A DEAL.

IT STILL IS A BIG DEAL, BECAUSE WE'RE STILL RATIONAL HUMANS AT HEART, WE'RE TALKING ABOUT BUYING NEW VEHICLES THAT DEPRECIATE 20 TO 30% AS SOON AS YOU DRIVE THEM OFF THE LOT.

NOT THE MOST RATIONAL THING ANYWAY, BUT WE WANT TO HAVE THAT SECURITY, THE COMFORT THAT, YOU KNOW, THAT BELIEF IF I NEED TO DRIVE SOMEWHERE, I WANT TO BE ABLE TO HAVE THAT RANGE.

SO RANGE IS DARN NEAR THE WHOLE CONVERSATION IN TERMS OF BEING ABLE TO HAVE THE COMFORT AND CONFIDENCE TO KNOW THAT I CAN GET IN THE CAR, I KNOW WHERE I CAN CHARGE IF I NEED TO.

IF I WANT TO DRIVE TO DETROIT AND TRY TO GET BACK, WHERE AM I ABLE TO CHARGE?

WHERE IS THE EFFECTIVE RANGE?

WHERE CAN IT TAKE ME?

AND AGAIN, THE AUTOMAKERS ARE MAKING SOLID ADVANCEMENTS ON THIS FRONT.

YOU HEAR A LOT ABOUT IN THE COLD WEATHER YOU GET DETERIORATION OF THE BATTERY, AND YOU DO, THE AUTOMAKERS ARE TRYING TO ADDRESS THAT THROUGH HEATING AND COOLS OF THE BATTERY SYSTEM, TRYING TO OFFSET SOME OF THAT RANGE CHALLENGES AS WELL.

INFRASTRUCTURE IS A BIG PART OF THIS, THOUGH.

CHARGING INFRASTRUCTURE IS A BIG DEAL, GETTING THOSE HIGH-SPEED CHARGERS OUT THERE.

160,000 GAS STATIONS IN THE U.S., WE CAN GO TO JUST ABOUT ANY CORNER AND FILL UP TANK OF GAS IN FIVE MINUTES OR LESS.

THAT'S WHAT WE'RE GOING UP AGAINST IN THE ELECTRIFIED ENVIRONMENT.

WE HAVE THAT, I WANT TO GET MY GAS NOW AND I WANT TO GET CHARGED AS QUICKLY AS POSSIBLE AND MOVE ON.

IT'S NOT INSURMOUNTABLE BUT NOT A SMALL TASK.

THIS IS SOMETHING WE'RE GOING TO BE DOING OVER THE NEXT SUCCESSION OFIERS.

>> I'M A NOVICE AT THIS.

EXPLAIN TO ME AT THE AUDIENCE WHEN YOU TALK ABOUT SUPER HIGH-SPEED CHARGING.

WHAT TECHNOLOGY DO WE HAVE IN PLACE NOW?

HOW LONG WOULD IT TAKE TO CHARGE, AND WHAT IS THE GOAL?

WHAT WOULD BE THE GOLD STANDARD FOR THE AMOUNT OF TIME TO CHARGE?

>> IT'S ALL OVER THE MAP RIGHT NOW.

I'LL PUT IT IN A NUTSHELL.

IN A HOME CHARGING SYSTEM, IF YOU PLUG IT INTO YOUR TRADITIONAL 110 OUTLET, HOURS ON END.

NOT OPTIMAL.

IF YOU ARE OVERNIGHT OR WHAT HAVE YOU, NOT A BIG DEAL.

YOU GET A 220 OR 240-VOLT CHARGER, THAT'S GOING TO SHRINK THAT TO HALF THE TIME OR SOMETHING ALONG THE LINES.

MUCH MORE MANAGEABLE.

WHEN WE'RE GETTING OUTSIDE OF THE HOUSE, YOU SEE THE CHARGING STATIONS, THAT'S THE DEVIL IN THE DETAILS, WHERE IF YOU PLUG IN -- IDEALLY WHAT WE WANT TO DO, AND I SUSPECT -- AND AGAIN, pTHIS ISN'T SET IN STONE.

IF WE COULD GET TO A 10-MINUTE, 20-MINUTE, 30-MINUTE CHARGING TIME WHERE YOU ARE GRABBING A BITE TO EAT, TESLA AND THE SUPER CHARGERS ARE ANGLING TOWARDS, THAT THE HIGH-SPEED CHARGING SYSTEMS AS WELL.

MAYBE CHARGING FOR 10 OR 15 MINUTES AND GETTING 50% INCREMENTAL RANGE OR SOME MEASURE THEREIN, WHERE IT GIVES YOU THAT COMFORT WHERE I KNOW WHERE I NEED TO GO AND IF I'M IN LANCING AND NEED TO GET TO GRAND RAPIDS, THAT GETS ME THERE, IF I GO AND PLUG IN AND GRAB A COFFEE OR BITE TO EAT FOR 15 OR 20 MINUTES, I COME OUT, I'M GOOD TO GO.

PART OF THE DEVIL IN THE DETAILS IS THE HIGH-SPEED CHARGING STATIONS MOVING FROM A LEVEL 1 CHARGER TO A LEVEL 2 CHARGER AND ON UP, THAT'S PART OF THE PROCESS.

>> I'M CURIOUS TO KNOW, THERE'S NO FREE LUNCH IN THIS WORLD, SO WHAT ARE WE LOOKING AT COST?

WHAT ARE THE UNITS?

WE'RE NOT FILLING UP IN GALLONS ANYMORE.

WHAT DOES THIS LOOK LIKE?

>> THAT'S A GREAT POINT TOO, AND THAT CAN VARY AS WELL.

IF YOU TALK TO THE UTILITIES, IT'S GOING TO DIFFER IF YOU'RE CHARGING IN THE HEART OF THE DAY, VERSUS CHARGING YOUR VEHICLE IN THE EVENING.

WHEN THERE'S LESS PEAK ENERGY USAGE.

THAT'S A BIG DIFFERENCE, AND INDEED SOME OF THE INCENTIVES CAN BE DIFFERENT, IF YOU COMMIT TO CHARGING IN THE EVENING WHEN IT'S OFF-PEAK, YOU CAN GET SWEETENERS IN TERMS OF THE CHARGING STATION, BENEFICIAL RATES ON THAT FRONT AS WELL POTENTIALLY, AND OBVIOUSLY THE SUPER CHARGERS OR THE LEVEL 2 CHARGE, LEVEL 1, LEVEL 2 CHARGERS AND SO ON, IT'S GOING TO VARY AS WELL.

IS IT A HIGH-SPEED CHARGER VERSUS A TRADITIONAL CHARGER.

NET NET AT THE END OF THE DAYS, WHAT WE WANT TO DO IS GET TO A POINT WHERE IT'S MORE COST EFFECTIVE THAN THE TRADITIONAL GAS, GASOLINE ENGINE.

SOME OF THAT IS A BIT OF A CHALLENGE WHEN WE HAVE $2 GAS, WHEN YOU GET CLOSE TO THE $3 GAS OR HIGHER, THAT COST/BENEFIT ANALYSIS SHIFTS AND WILL SHIFT MORE TOWARDS THE ELECTRIFIED VEHICLE.

>> HERE IN WEST MICHIGAN, AUTO PARTS SUPPLIERS CRITICAL TO THE WEST MICHIGAN ECONOMY.

THERE'S A TRANSITION TAKING PLACE, AND I CAN ONLY IMAGINE WITH THE PARTS SUPPLIERS ARE TAKING INTO CONSIDERATION RIGHT NOW, RIGHT?

BECAUSE THERE'S NO CERTAINTY THAT EV'S WILL TAKE OFF, DON'T MEAN TO DISAGREE WITH ANYBODY HERE, LOOKS AS THOUGH THAT'S THE INVESTMENT IS HEADING.

IF YOU'RE A SUPPLIER, YOU'RE WEIGHING THIS, RIGHT?

WHAT IS THE PSYCHOLOGY GOING ON WITH THE PARTS SUPPLIERS?

AND HOW ARE THEY PREPARING FOR THIS?

>> THIS IS A HIGH-STAKES GAME FOR THEM.

THEIR BUSINESS, AND RIGHTFULLY SO.

I'LL BE THE FIRST TO POINT OUT, IF THIS EV EXPERIMENT WORKS, IT'S GOING TO HAVE TO COME WITH THE SUPPORT OF THE SUPPLY CHAIN, THE AUTOMAKERS CAN'T DO THIS ALL THEMSELVES, NOW WHAT SUPPLIERS ARE CERTAINLY MINDFUL OF, A FEW THINGS HERE, THAT ADOPTION CURVE THAT WE TALK ABOUT, THE CONSUMER ADOPTION CURVE QUITE LIKELY IS GOING TO BE CHOPPY, NOT THIS SMOOTH UPTAKE, EXPONENTIAL GROWTH AND WHAT HAVE YOU, THERE'S GOING TO BE FITS AND STARTS IN THIS.

THE DEVIL IS IN THE DETAILS WITH THIS.

AS A SUPPLIER, ONE, WE'RE GOING TO HAVE THE TRADITIONAL BOOK OF BUSINESS THAT WE'VE GOT AND GENERALLY HOPEFULY MAKING MONEY FOR YOU, IT'S PROFITABLE, AND THEN YOU'RE ASKED TO QUOTE ON THE NEW BOOK OF BUSINESS.

THE NEW UNTESTED GROUND PROVEN IN TERMS OF CONSUMER DEMAND, ELECTRIC VEHICLES.

HOW DO WE CREATE THE MOST OPTIMAL PRICING SCENARIO AND HOPEFULLY PROFIT MARGIN SCENARIO AS YOU'RE QUOTING THIS?

THAT'S ALL GOING TO COME DOWN TO WHAT VOLUMES ARE YOU BAKING INTO YOUR BUSINESS PLAN?

HOW ARE YOU -- THIS IS A BIG DEAL WITH SUPPLIERS IN TERMS OF THEIR LINES AND WHERE THEY'RE PRODUCING THE PARTS.

HOW FLEXIBLE ARE THE MANUFACTURING LINES TO PIVOT TO OTHER PRODUCTS OR OTHER MODELS AND OTHER COMPONENTS IF THERE IS VOLUME OFFSET?

IF THERE IS SOME VOLUME UNDERPERFORMANCE AS IT WERE.

THAT KIND OF AGILITY AND FLEXIBILITY IS GOING TO GO A LONG WAY.

AND FRANKLY IN SOME CASES PUSHING BACK ON THE AUTOMAKERS, SAYING I KNOW YOU'RE GOING TO DO THIS MUCH VOLUME.

WE'RE GOING TO COMMIT TO A DIFFERENT, MAYBE A SMALLER SUBSET OR PROTECT FOR A SMALLER SUBSET AT THE OUTSET BECAUSE WE NEED THAT FLEXIBILITY.

THAT'S WHERE YOU HAVE A BROADER CONVERSATION BETWEEN THE SUPPLIER AND THE UPSTREAM CUSTOMER WHETHER IT BE A TIER 1 SUPPLIER OR THE AUTOMAKER THEMSELVES.

>> WE HAVE LG CHEMICAL IN OUR BACKYARD IN HOLLAND PRODUCING THE LITHIUM-ION BATTERIES.

>> ABSOLUTELY.

BATTERY PACK SIDE OF THE EQUATION, BATTERIES IN GENERAL, IS OBVIOUSLY A HUGE COMPONENT IN ALL OF THIS.

THAT'S WHAT LITERALLY PROPELLED THESE VEHICLES.

WE'RE GOING TO SEE A SIGNIFICANT, WE'RE ALREADY SEEING A SIGNIFICANT INVESTMENT IN ADDITIONAL BATTERY CAPACITY.

LG HAS DONE GREAT WORK WITH GENERAL MOTORS, WHAT GM IS TALKING ABOUT DOING IN SPRING HILL, TENNESSEE.

WE'RE GOING TO SEE MORE AND MORE OF THIS DEPLOYMENT, AND REALLY INVESTMENT IN BATTERY CAPACITY HERE IN NORTH AMERICA IN U.S., AND ALL AROUND THE WORLD.

>> WE'LL STICK WITH TECHNOLOGY.

IT IS NOT EV-SPECIFIC, BUT I THINK YOU KNOW WHERE I'M HEADING NEXT.

THAT IS, THIS GLOBAL SEMICONDUCTOR SHORTAGE.

HOW DID THIS ALL COME ABOUT, AND HOW DO WE CREATE MORE PRODUCT TO MEET DEMAND?

>> YEAH, THIS IS HANDS DOWN IN THE NEAR TERM, ONE OF THE BIGGEST ISSUES FACING THE INDUSTRY RIGHT NOW.

THE GOOD NEWS SIDE OF THIS, IN THE DISCUSSION IN THE U.S., DEMAND IS STRONG FOR VEHICLES.

WE'RE SELLING VEHICLES AT A RAPID CLIP.

AMAZINGLY SO CONSIDERING WE CAME OFF OF THE PANDEMIC, WE'RE NOT FULLY THROUGH IT YET, BUT IN TERMS OF THE SIGNIFICANT IMPACT FROM A GDP PERSPECTIVE LAST YEAR AND REALLY STILL THE TOUGH SLEDDING FROM AN UNEMPLOYMENT PERSPECTIVE, CONSUMERS ARE STILL ENGAGED IN BUYING NEW AND USED VEHICLES.

THAT'S THE GOOD NEWS.

CHALLENGE RIGHT NOW IS WE CAN'T BUILD THEM FAST ENOUGH, AND SEMICONDUCTOR SHORTAGE IS A BIG ONE, WHAT WE SAW IN APRIL GOING INTO MAY AND SHUTTING DOWN A LOT OF PLANTS, COMING BACK OUT, THE REBOOT IF YOU WILL, WAS A LITTLE SLOW.

IT WAS UNSURE IF THE DEMAND WAS GOING TO BE THERE.

WELL, DURING THAT WHOLE PERIOD OF TIME, THE CONSUMER ELECTRONICS SIDE OF THE WORLD WAS GOING LIKE GANG BUSTERS.

ANYBODY LOOKING FOR A PS-5, YOU CAN ATTEST, THEY WEREN'T AROUND.

THE NEXT GENERATION XBOX, THE 5G HAND SETS AND LAPTOPS, FLYING OFF SHELVES OFF THE RETAILERS' SHELVES.

WE SAW A SIGNIFICANT DRAW ON THE SEMICONDUCTOR END, AND ON THE AUTOMOTIVE SIDE, IT WAS LEFT IN THE COLD SOMEWHAT.

WE'VE BEEN TRYING TO REBUILD THAT, GETTING THAT CAPACITY HAS BEEN CHALLENGING, AND IT'S ON A GLOBAL SCALE BECAUSE IT'S NOT JUST THE U.S. OR NORTH AMERICA LOOKING FOR THE CHIPS.

THERE'S ANYWHERE FROM A THOUSAND TO 1400 SEMICONDUCTORS IN A PASSENGER CAR.

SO THAT GIVES YOU SOME IDEAS OF THE SCALE OF WHAT WE'RE TALKING ABOUT HERE.

SO THAT'S BEEN A CHALLENGE.

MIX IN A SNOWSTORM DOWN IN TEXAS THAT KNOCKS OUT NATURAL GAS AND KNOCKS PRODUCTION OUT, AND ALSO CREATES CHALLENGES IN GETTING PROPYLENE AND POLYPROPYLENE GOING INTO RESINS AND FOAM FOR SEAT FOAM, MORE CHALLENGES.

WHY DON'T WE MIX IN A SHIP BLOCKING THE SUEZ CANAL BECAUSE WE HAVEN'T HAD ENOUGH TO DEAL WITH, THAT CREATES CHALLENGES ON THE LOGISTICS AND PORT SIDE IN ADDITION TO PORT CONGESTION, AND TRYING TO GET THE COVID CONTAINMENT REQUIREMENTS HAS CREATED BLOCKAGES AT THE PORT SIDE OF THE EQUATION, THAT IMPACTS COMPONENT TRADE IN BRINGING IN COMPONENT SUPPLY THAT WAY AS WELL.

>> WITH WHAT WE EXPERIENCED THROUGH THE PANDEMIC, DO YOU SUSPECT WE'RE GOING TO SEE MORE INDUSTRY ONSHORING WHEN YOU LOOK AT SUPPLY CHAIN AND DISRUPTIONS WE'VE SEEN IN THE PAST YEAR?

>> I REALLY DO, I THINK ABSOLUTELY CORRECT, AND I THINK WE'VE GOT A COUPLE OTHER GUIDE POSTS TO THAT AS WELL.

USMCA, THE RENEGOTIATION OF NAFTA.

IT PROBABLY CAME AT THE RIGHT TIME FROM THAT PERSPECTIVE AS WELL.

YOU'VE GOT THAT ON THE ONE HAND, AND YOU HAVE THIS SUCCESSION OF OTHER STUFF HAPPENING, AN EARTHQUAKE IN JAPAN, THE SEMICONDUCTOR SHORTAGE, AGAIN, WEATHER EVENTS, THERE WAS A FIRE AT A SEMICONDUCTOR PLANT LAST MONTH IN JAPAN.

AGAIN, WHEN YOU'RE TYING YOUR SUPPLY HALF A WORLD AWAY, A SHIP AWAY, GOD FORBID AIR FREIGHT AWAY, THERE IS A BENEFIT TO HAVING A MORE LOCALIZED SUPPLY CHAIN, DOESN'T MEAN IT COMES TO THE U.S., HOPEFULLY A GOOD CHUNK OF IT WILL, MAYBE IT'S MEXICO, MAYBE CANADA, SOMETHING MORE IN THE HEMISPHERE AND SIMILAR CASES IN EUROPE AND ASIA.

I DEFINITELY THINK WE'LL BE SEEING MORE REGIONALIZED SUPPLY.

DOESN'T MEAN THE IDEA AROUND GLOBALIZATION COMPLETELY GOES AWAY, BUT I THINK IT DOES EVOLVE.

IT EVOLVES INTO REGIONAL SUPPLY OPPORTUNITIES WHICH IS GREAT FOR SUPPLIERS, INCLUDING WEST MICHIGAN SUPPLY BASE.

>> LOOKING BACK TO 2020, 2019, AND WHAT WE'VE GONE THROUGH WITH THIS PANDEMIC, WHAT HAS THE INDUSTRY LEARNED, OTHER THAN THE SUPPLY CHAIN ISSUES, WHAT WAS LEARNED THROUGH ALL OF THIS, AND WHAT WILL WE SEE IMPLEMENTED IN THE NEXT FEW YEARS?

>> YEAH, BOY, THAT'S A GREAT QUESTION.

WHAT WAS LEARNED?

YOU KNOW ANY TIME WE GO THROUGH THESE KIND OF DISRUPTIONS, WE DO LEARN A LOT.

THERE'S A RESILIENCY TO SUPPLIERS AND AUTOMAKERS AS WELL.

IT'S CLICHE TO SAY, YOU DO SEE THE MEDDLE OF A COMPANY AND WORKERS AND HUMANITY WHEN WE GO THROUGH THE CRISES.

WHAT WE SAW LAST YEAR, THERE WAS A HUNKERING DOWN TO BE SURE, WE DUSTED OURSELVES OFF COLLECTIVELY AS A SOCIETY BUT EVEN WITHIN THE AUTO INDUSTRY, DUSTED OURSELVES OFF AND REBOOTED, AND AGAIN, IT'S NOT OVER YET.

AGAIN, WE'RE DEALING WITH SOME OF THE AFTEREFFECTS EVEN STILL ON THE SUPPLY CHAIN SIDE.

HOW ARE WE DEALING WITH THAT?

AGAIN, THINK ABOUT THE DEALER, DEALERSHIP SIDE OF THE EQUATION.

EVERY DEALER YOU TALK TO SAYS I COULD USE A LOT MORE CARDS THAN WHAT I GOT RIGHT NOW.

WHAT ARE THEY DOING?

LEARNING TO DO WITH WHAT THEY HAVE.

WE'RE SELLING VEHICLES AT STILL A VERY BRISK CLIP.

WHEN WE TALK ABOUT RECOVERIES, U-SHAPED RECOVERY?

VERY V-SHAPED IN TERMS OF RETAIL SALES RIGHT NOW.

THAT RESILIENCY AND, AGAIN, FLEXIBILITY AND AGILITY CAME THROUGH THIS PANDEMIC.

>> WHAT'S THE FORECAST?

WHAT ARE WE LOOKING AT?

WE'VE GOT STIMULUS DOLLARS THAT ARE FLOATING AROUND OUT THERE NOW?

I THINK FOLKS HAVE BEEN ABLE TO SAVE MORE THROUGH THIS PANDEMIC?

>> AND THEY'RE ENGAGED AND LOOKING TO BUY.

THAT IS THE INTERESTING DYNAMIC.

IT'S ALMOST MORE OF A TESTAMENT OR A GLIMPSE INTO BEHAVIORAL ECONOMICS WHEN YOU START THINKING ABOUT HOW CONSUMERS, AND WE SEE THAT AND I TALK ABOUT SALES BUT THEY'RE SO DIFFERENT TALKING ABOUT SALES IN THE U.S. AS A COLLECTIVE.

WHAT'S HAPPENING IN NEW YORK AND SOME OF THE METROPOLITAN AREAS WHERE YOU'RE SEEING FOLKS SAY I KIND OF LIKE THIS WORK FROM HOME THING, MAYBE MY HOME IS IN A SUBURBAN LOCATION VERSUS THE METROPOLITAN AREA, I NEED A CAR NOW.

MAY BE A USED CAR BUT BENEFICIAL TO THE NEW VEHICLE ENVIRONMENT.

WHEN WE LOOK AT SALES OUTLOOK FOR THIS YEAR, WE'VE BEEN INCREASING IT, WE'RE AT 16.5 MILLION UNITS U.S.

SALES.

BACK IN 2019, IT WAS 17.1.

IT'S STILL OFF FROM 2019, IT IS.

JUST ABOUT THE ONLY REASON IT IS BECAUSE OF DAILY RENTAL SALES TIED TOWARDS AIR TRAVEL AND RENTAL TRAVEL, WHICH IS BUSINESS TRAVEL, WHICH HASN'T COME BACK YET.

FROM A RETAIL SALES PERSPECTIVE, IN GENERAL TERMS OFF TO THE RACES.

AND AGAIN, YOU TOUCHED ON IT.

THE INCENTIVES AND STIMULUS MONEY IS STARTING TO INJECT INTO THE MARKET.

SO IT'S A GOOD TIME TO BE SELLING VEHICLES RIGHT NOW, NOT UNLIKE WHAT YOU'RE SEEING IN THE REAL ESTATE MARKET.

IT'S A SELLER'S MARKET.

FOR AUTOMOTIVE IT'S CAN YOU GET THE VEHICLE TO SELL, WHETHER IT'S USED OR NEW?

WE'RE ENTHUSED IN TERMS OF THE RECOVERY WE'VE SEEN IN THE U.S.

VEHICLE SALES.

THE CHALLENGE BEING WE JUST GOT TO BE ABLE TO BUILD THOSE VEHICLES AND THAT'S SOMETHING WE'RE RUSTLING WITH.

>> QUICKLY, WHAT WAS THE NUMBER, WHAT WAS THE LOW WE HIT DURING THE GREAT RECESSION AS A COMPARISON.

>> YEAH, WHEN WE GO BACK TO THE GREAT RECESSION WE HIT A 10.4 MILLION UNITS.

LAST YEAR, WHEN WE WERE AT THE DEPTH AND AGAIN, WORRIED ABOUT GDP COLLAPSE AND UNEMPLOYMENT SKYROCKETING, OUR NUMBER WE WERE PEGGING RIGHT AROUND 12.7 MILLION UNITS, SO STILL BETTER THAN THE GREAT RECESSION, BUT STILL DEVASTATINGLY BAD.

WE ENDED THE YEAR AT 14.6 MILLION UNITS, WE OUTPERFORMED.

THE OUTPERFORMANCE WAS BY AND LARGE RETAIL BASED.

AGAIN, THOSE RETAIL CONSUMERS, THOSE FOLKS, AGAIN, SHIFTING THEIR HOUSEHOLD TOWARDS SUBURBAN ENVIRONMENTS, LOOKING FOR THE VEHICLE THAT SAVES SPACE.

SO RIDE SHARING WAS NOT ON THE ORDER LAST YEAR.

IF YOU WERE BUYING GOODS AND LOOKING TO GET UBER EATS AND SOMETHING LIKE THAT, IT WAS COOL.

IT WASN'T A LOT OF RIDE SHARING, IT WAS MY OWN PERSONAL TRANSPORTATION, THAT RESONATED LAST YEAR.

>> WE HAVE 90 SECONDS, I LEFT POLITICS FOR LAST.

IMAGINE THAT.

THE BIG THREE COMING OUT WITH A STATEMENT AGAINST THE PROPOSED VOTING LEGISLATION IN THE STATE.

QUOTE, GOVERNMENT MUST SUPPORT EQUITABLE ACCESS TO THE BALLOT TO ENSURE ALL ELIGIBLE VOTERS CAN EXERCISE THEIR RIGHTS.

GOVERNMENT MUST AVOID ACTIONS THAT REDUCE PARTICIPATION IN ELECTIONS PARTICULARLY AMONG HISTORICALLY DISENFRANCHISED COMMUNITIES, PERSONS WITH DISABILITIES, OLDER ADULTS, RACIAL MINORITIES AND VOTERS.

QUITE A STATEMENT FROM THE AUTO INDUSTRY.

>> IT WAS, IT WAS A PROACTIVE MEASURE TO BE SURE BY THE AUTOMAKERS ON THAT FRONT, AND I GUESS AT THE END OF THE DAY TOO, IT'S NOT UNLIKE WHAT WE'VE SEEN IN GENERAL.

GM-FORD HAVE BEEN LEANING A BIT MORE OVER THE LAST FEW YEARS, TO THEIR CREDIT TOO, WHEN YOU THINK ABOUT IT DOVETAILS INTO THE PRODUCT MIX, WHAT THEY'RE DOING IN MARKETING AND OUTREACH TO ALL BUYERS, AND AT THE END OF THE DAY, THEY'RE IN THE MARKET TO SELL, HOPEFULLY DYNAMIC VEHICLES, AND THEY WANT TO, YOU KNOW, DO THE BEST FOR THEIR COMMUNITY AND ALL STAKEHOLDERS IN THE PRESENTATION AS WELL.

>> YOU DON'T WANT TO LOSE BUYERS EITHER.

MIKE WALL, IHS MARKET, THANK YOU SO MUCH.

>> THANK YOU.

>> THANK YOU FOR JOINING US.