VANDALIA, OH – Inteva Products dedicates its new engineering center here this week to support development of world-class vehicle interiors, and an executive says the supplier hopes to hire additional engineers within five years.

Some 145 employees have taken over the new technical center that used to be occupied by Evenflo. Until recently, this group of engineers, technicians and support staff rented office space inside the Delphi plant on the opposite side of the Interstate.

The employees had been part of Delphi until its interiors business was sold to private-equity investors Renco Group and became Inteva in March 2008.

Inteva has 200 engineers globally dedicated to vehicle interiors, including 160 in North America.

The engineering staff here numbers 110, and Inteva’s target is to reach about 130 in the next three to five years, Patrick Stewart, vice president and executive director for Inteva Interior Systems, tells Ward’s.

“It’s not tomorrow, and it’s not next week,” Stewart says. “But it’s very steady, anticipated growth we are pursuing. It’s a solid 5-year business plan.”

In addition to the extra hires in Ohio, Inteva hopes to add an equal number of new engineers at its headquarters in Troy, MI, in the same timeframe, Stewart says.

Following through on that strategy requires the company to meet its revenue goals in the years to come and assumes relative stability in overall industry sales and the arrival of new contracts.

“It’s based on programs and how they come in. We’ve got to make sure it’s the smart thing to do,” he says of future hiring. “We could pour in engineers, but we’re being very careful.”

During the recession of 2008 and 2009, Inteva, like other suppliers, reduced its engineering workforce about 15%. As the economy has improved, all those positions since have been restored, Stewart says.

The 73,000-sq.-ft. (6,782-sq.-m) facility includes a manufacturing development lab with a full paint shop that allows production cells to be simulated so problems can be identified and fixed before the launch of salable units.

The engineering center includes rapid prototyping of parts intended for production, as well as a quality lab with a contact-based coordinate measuring machine for taking thousands of measurements of interior components to ensure technical specifications are being met.

Incentives and grants from state and local officials to keep the tech center in Ohio amounted to $1.2 million.

Inteva Interior Systems has similar tech centers in Seoul and Wuppertal, Germany, for development of instrument panels, cockpits, center consoles, door trim and headliners.

In North America, Inteva has manufacturing plants in Gadsden and Cottondale, AL; Adrian, MI; North Kansas City, MO; Matamoros, Mexico; and Oshawa, ON, Canada, producing interior components for General Motors pickups and SUVs and Mercedes-Benz cross/utility vehicles.

Through the recession, Inteva maintained most of its manufacturing capacity in North America. The only plant to close was in Orion Township, MI, because GM ended production of the Chevy Malibu and Pontiac G6 at its plant nearby. In turn, Inteva opened two new plants in Mexico and Canada.

“We’re actually OK from a North American capacity standpoint,” Lon Offenbacher, Inteva president and CEO, tells Ward’s. “We’re flexible with the market. We still have some open capacity, and we aren’t seeing any real stress points.”

With interior components, Inteva follows the rule that suppliers should locate manufacturing facilities close to customer assembly plants. “If someone opens up a new assembly plant, we’ll be there for them,” Offenbacher says.

The economics for interior suppliers have been severely strained for several years. Lear, Delphi and Visteon exited many interior segments years ago.

A new challenge has surfaced as Detroit auto makers take advantage of Tier 2 wage agreements with the United Auto Workers union. For instance, at GM’s Orion plant, about 40% of its workers earn wages at the lower second-tier rate.

Paying about $14 an hour to these new hires allows auto makers to take over work that used to be done by suppliers.

As GM tools up the Orion plant to launch the Chevrolet Sonic and Buick Verano small cars in September, the labor agreement enables the auto maker to competitively staff cockpit assembly internally, on the line.

This new dynamic could be perceived as a threat to cash-strapped suppliers, but Offenbacher doesn’t see it as a problem for Inteva, because the supplier consistently develops expertise that auto makers lack.

“If you were purely an assembler, then I think you’re living on a bit of borrowed time,” he says. “But our core business is the reason we have tech centers like this.”

Offenbacher says he doubts the trend of auto makers assembling their own components will go very far.

“Unless they want to vertically integrate and get back into component lines of business, I think it would be foolish for them to try and master that technology because it’s ever changing,” he says. “We have multiple customers who provide outlooks for new technology, and we see the ebb and flow in the industry of those new technologies.”

In the meantime, Inteva continues to celebrate the Ward’s 10 Best Interiors award for the Chevrolet Cruze; its instrument panel comes from the supplier.

Ward’s judges recognized the Cruze, as well as its rivals the Ford Focus and Hyundai Elantra, for their quality materials, soft surfaces and upscale designs, reflecting a rising standard for small-car interiors.

“That’s where things will be going,” Stewart says. “It’s not just going to be Cadillac anymore. It’s got to be across the board.”

Future interiors will emphasize stitching and soft appliqués, as well as steering wheels and other components wrapped in leather or artificial leather. “Those things will move through all levels of the vehicle,” Stewart says.

Where does that leave luxury auto makers? How will their interiors stand out if less-expensive vehicles continue to upgrade?

“It’s always an opportunity, because they will differentiate their vehicles and will put better content or better materials in those vehicles,” he says. “BMW and Mercedes will lead the way. I think as entry-level and low-level vehicles start to see their interiors pick up, the same thing will happen in the upper-level interiors, as well.”

tmurphy@wardsauto.com