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September 28, 2018 02:00 AM

Editorial: Auto suppliers face bold choices as sector evolves

Rubber & Plastics News Staff
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    Imagine taking a look at your core business and coming to the realization that you could lose 70 percent of that over time if your company fails to adapt to new technologies. With all the focus on the evolving automotive market where electric vehicles and autonomous driving potentially will give future mobility a whole new makeover, such a scenario is not that much of a stretch.

    That is the road map Freudenberg Sealing Technologies found when taking a look at how its current offerings match up to what may be needed in this future transportation world. FST CEO Claus Moehlenkamp estimates that roughly $1 billion of its automotive business is at risk if it doesn't adapt to embrace E-mobility changes within the automotive industry.

    FST found that its business has a deep knowledge base at the component level, as E-mobility should bring a good chunk of business for the sealing technology it already possesses. But it became clear that as time goes forward, the firm will need to broaden its base to help cover some of the revenues that may disappear.

    What FST officials decided when studying the predicament was it needed to bolster its competency in electric batteries, an area far from its current core business. They realized they had a lot to learn, but they haven't wasted any time, as the Freudenberg business already has begun to position itself with two recent acquisitions. The firm also realizes electrification will play a role in many areas outside mobility, giving it a wider net to draw business.

    Of course, timing is an element that can't be pinned down in this planning. Best case scenario will bring changes in the next 15 years. Worst case would see the birth of a small niche market, with current engine technology continuing to dominate the landscape. Either way, FST knows this creates a balancing act where it must continue to service its core business, while investing for a future that holds no guarantee.

    It's a plan where financial stability and long-term planning are vital, along with a large dose of patience.

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    Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

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