Fading Optimism - Engineers vent over cost pressures, 'whipsawing'

The relentless push in the auto industry for better, faster, cheaper, lighter, is taking its toll on the engineering ranks.

Nearly half of the 400-some engineers polled in the Ward's Auto World 20th annual engineering survey report their frustration level is higher than it was a year ago, and about the same number would not encourage their children to pursue a career in automotive engineering.

And about 60% say that cost pressures are indeed hurting the engineering quality of future vehicles.

A number of engineers at automakers say their jobs are an exercise in futility. They may spend months on a job, only to have a headstrong executive show up and say, for instance, that the color of a taillamp needs to be a shade darker. That simple remark launches an avalanche of cost overruns as the team scurries back to the drawing board.

"Freeze dates are a joke," one engineer writes. "We don't do engineering anymore. We just push a lot of paper and go to meetings," another engineer says. "I'm not ungrateful for my job. It pays well. But I'm not in love with my job anymore," says another.

When WAW conducted its first engineering survey in 1979, folks were considerably more optimistic. If they had it to do over again, 71% of respondents then said they would be an auto engineer. Today, 45% say they would rather work in other engineering or in another field.

Ron Moore, senior engineer of mechanisms and control at Peregrine Inc., laments the auto-makers' practice of "whipsawing" one supplier against another to force down prices. "The level of ethics has diminished as a result of the (Inaki) Lopez influence throughout the industry," Mr. Moore says.

He refers, of course, to J. Ignacio Lopez de Arriortua, who made his mark as purchasing chief at General Motors Corp. like a lumberjack in the forest.

"That does not mean that suppliers have the right to gouge their customers," he says. "But it also does not mean the OEMs have the right to flog the suppliers as they do in general."

He complains that OEMs are prying too much into supplier's affairs to determine a its profit margin on a particular product. Other respondents complain that OEMs are dictating which lower-tier suppliers to use in product development.

"They want to know more about you than they really need to know," Mr. Moore says.

Supplier engineers are not alone in their negative assessment of the industry.

"The automakers have shifted a lot of burden to full-service suppliers, but some of these same suppliers have not attained full-service capability," says Michael Jablonski, product design engineer at Ford Motor Co.'s Large Luxury Vehicle Center in Dearborn, MI.

Those services include product design and testing, as well as a greater degree of responsibility.

"Typically they don't take the initiative as much as I'd like," Mr. Jablonski says. "They're still waiting for us to tell them what we want in a design. To me, a real full-service supplier would read the assumptions (in the contract) and go for it. I'd expect them to take the initiative and come back for confirmation now and then. It's moving slower than we had expected."

While Mr. Jablonski contends that suppliers receive more engineering direction than they need from automakers, his views are in the minority, according to our survey.

Roughly half of the engineers surveyed - representing both suppliers and automakers - say that suppliers are receiving too little engineering direction from OEMs. The other half is divided between "too much" and "the right amount."

"The more we know, the better we can supply great product," writes one supplier engineer.

Interestingly, a number of supplier engineers agree, for different reasons, with Mr. Jab-lonski's assertion that suppliers are getting too much engineering direction from OEMs.

"Suppliers are expected to be 'full-service,' yet they are not given the freedom to make changes without overscrutinization by OEM engineers who don't fully understand the details and trade-offs," writes Steve Klotz, senior product engineer at Webasto Sunroofs Inc.

The survey findings are not all gloom and doom. A glimmer of light shines at the end of the poll, where roughly 60% of engineers agree the industry will become healthier and more profitable in the long run despite the added cost to suppliers for handling more engineering and design work.

"I love my job. I love the fast past," says Greg Daniel, project manager at Palmer Plastics in Englewood, OH. "I can put my input in. I can be creative. I think working with the Big Three is a good experience."

With only two years on the job, Mr. Daniel's more senior colleagues would probably mutter, "Give it time."

Suppliers more upbeat

on global warming

This year's survey covered a wide range of topics facing automotive engineers today, from Internet access at the office and career opportunities to alternative fuels and global warming.

And in most areas, supplier and OEM engineers are in agreement.

A majority of them agree, for instance, that there is no consensus among scientists about the threat of global warming, and that it will be at least five years before a practical, electric family sedan will be available in the United States. They also say it will be at least five years before cost-effective fuel cells will be available.

But in all of those areas, supplier engineers are slightly more optimistic than their OE counterparts.

The two sides disagree widely when asked if their companies would change their manufacturing strategies to meet future global warming challenges. More than 80% of automaker engineers answer in the affirmative, compared with less than half of supplier engineers.

The answer makes it clear that engineers think that automakers will take a harder hit than suppliers when it comes to dealing with plant emissions.

Early supplier involvement crucial

Engineers from both sides of the aisle also agree that the trend of automakers shifting product development work to suppliers accelerated in 1997, and that the shift overall has been positive.

Not surprisingly, a greater proportion of supplier engineers (74.2%) than OEM engineers (55.6%) consider the shift to be a plus.

The two sides, however, differ on the timing. Fifty-six percent of OEM engineers say suppliers are involved early enough in the product development process, but 58.6% of suppliers say they are not.

And the two sides agree that, ideally, suppliers should be involved right at the beginning of product development.

But when asked in reality how soon suppliers are involved in product development, their responses are puzzling. Most supplier engineers say they are brought into a project one to three years before launch. Most OEM engineers, however, say suppliers are integrated at the outset or two years before launch.

So what gives? It seems clear that supplier and automaker engineers see the world through quite different lenses.

We gave supplier engineers a chance to rank their OEM customers' willingness to have suppliers involved early on in product development. With 1 being the best and 5 being the worst, Chrsyler Corp. led the way with a mean score of 1.8, followed by Ford with 2.3 and GM with 2.8.

Most of the Japanese and European transplants fell in between 2.3 for Toyota Motor Mfg. USA Inc. and 3.6 for Mitsubishi Motor Mfg. of America Inc.

While Chrysler was the favorite in terms of product development, the nation's No.3 automaker also is the most receptive when a supplier comes calling with a nifty new gizmo, the survey indicates.

It wasn't even a contest: 64.3% of supplier engineers rated Chrysler as the most receptive to new supplier technology, trailed by 18.7% for GM and 17% for Ford.

Career opportunities

With automakers handing over more and more engineering work to suppliers, it should come as no surprise that engineers on both sides consider career opportunities to be better at suppliers.

Despite this shift, 42.9% of automaker engineers and 47.9% of supplier engineers are happy with their current assignments.

But a Delphi Harrison Thermal Systems engineer says he's fed up with the business and is considering leaving.

The engineer, who requested anonymity, complains of employees struggling with terribly outdated equipment, but because they get the job done, management sees no need for new equipment. "Some people here are extremely good at getting the job done with a shoestring and a rubber band."

He says he would have a hard time encouraging his children to pursue a career in automotive engineering.

"I would be just as happy to see my children learn a technical trade as I would see them getting into engineering," he says. He admits his perspective is colored by his involvement with United Auto Workers union members at his plant.

"I see UAW personnel making much more money than I am," he says, "with not nearly the amount of education or training, and with a lighter work load." He earned $60,000 last year.

There seems to be some disagreement among respondents about the acceptance of female engineers in the auto industry.

One woman wrote that she might encourage a son to become an automotive engineer, but not a daughter.

But Gregory Bober, a product engineer at Ford's Visteon Automotive Systems, wrote that he would encourage a daughter to pursue such a career, but not a son.

"Large corporations want minorities so they can advance them and show the world they are balanced," Mr. Bober says. "It makes the probability that if you're a minority with a technical degree, you get promoted no matter what you do . . . The probability of advancing is higher because the population is small. The industry is trying to overcome the good ol' boy image."

It's a tall task. Of the Society of Automotive Engineers' 75,000 members worldwide, less than 5% are women.