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Automotive Outsourcing Sparks Growth at ERIM International

5 August 1998

Automotive Outsourcing Sparks Growth at ERIM International

    TRAVERSE CITY, Mich., Aug. 5 -- Outsourcing of automotive
research and product development work has generated double-digit growth rates
at ERIM International (EI) in Ann Arbor, Mich.
    Mike Dudzik, director of ERIM International's Automotive and
Transportation Center, said the center has seen its business grow at an
average annual rate of 40 percent or more over the past four years.  EI is an
exhibitor at the University of Michigan's Management Briefing Seminars,
August 3-7, in Traverse City.
    "The outsourcing of automotive product development work has increased
dramatically in recent years," Dudzik said.  "We expect the trend to continue
as OEMS and their Tier One suppliers seek to further shorten development
cycles, cut costs and leverage internal resources."
    Dudzik said that the automotive portion of ERIM International's annual
business has grown from one percent to more than 10 percent since 1994.
ERIM's transportation group currently has more than $20 million in research
and consortium programs, including:

    *  A $2.5 million, 26-month research project to develop new systems to
study and test future vehicle performance and safety.  Participants in the
Variable Dynamic Testbed Vehicle (VDTV) program, which is sponsored by the Jet
Propulsion Laboratory and funded by the National Highway Traffic Safety
Administration (NHTSA), include Bosch, Delphi Chassis Systems, Roush
Industries and TRW.
    *  A $15-million, four-year program to commercially develop a new
processing technology to increase the surface hardness, durability and
corrosion resistance of metals.  Plasma-based ion implantation (PBII) has the
potential to generate more than 75,000 U.S. jobs.  PBII consortium members
include A.O. Smith, DuPont, General Motors and Harley-Davidson, among others.
    *  A three-year, ongoing study of advanced materials for the United States
Council for Automotive Research (USCAR) and its Partnership for a New
Generation of Vehicles (PNGV).  Participants include Chrysler, Ford and
General Motors, in addition to the Federal government.

    Dudzik said that EI also recently completed an intensive eight-month
program to develop an advanced keyless entry system for a major Tier One
automotive supplier.  In addition, he noted that EI is about to launch a
multi-million-dollar research project to establish the foundation for a new
generation of affordable off-road vehicles for both military and commercial
applications beginning in the 2004 model year.
    "New technology introduction is occurring at a blistering pace in both the
product and manufacturing arenas," Dudzik said.  "Today, OEMs and their Tier
One suppliers also are dealing with a variety of technologies and product
features developed by companies traditionally not considered to be part of the
automotive supply chain.
    "In many cases, OEMs and their suppliers are not equipped or staffed to
integrate these new technologies into their product plans on the accelerated
schedule dictated by today's global marketplace."
    EI's historic links to major universities and the country's system of
national laboratories further strengthens the organization's role as a
full-service research-and-development supplier to the automotive industry.
    Dudzik added that ERIM International also views technology as a global
commodity and its partnership concepts reflect that philosophy.  "Technology
doesn't recognize national boundaries," he said.  "At EI, we're actively
working with European and Asian organizations, as well as domestic companies,
to identify future partnership opportunities."
    ERIM International's automotive research activities include vehicle-based
data acquisition systems, systems engineering and integration of vehicle
electronics, vehicle navigation systems, advanced safety systems, and advanced
traffic management and traveler information systems.
    With its headquarters and extensive laboratory facilities in Ann Arbor,
ERIM International has a staff of 500, and annually conducts more than $80
million in contract research and development, research consortium management
and technology licensing.  Founded in 1946 as a research laboratory of the
University of Michigan College of Engineering, ERIM has been a private
corporation since 1997.