An Open Letter from Terry McCormack President and CEO, Affinia Group Inc.

Yesterday, we received the following Open Letter from Terry McCormack, president and chief executive officer (CEO) of Affinia Group, Inc. In the letter, McCormack announces that the Michigan-based auto parts manufacturer plans to decrease its presence at this year’s AAPEX show in Las Vegas. While news of the company’s scaled-back presence may be news in and of itself for Affinia’s customers and competitors, McCormack points out that the decision speaks to the more significant shifts taking place in today’s business world – changes that cannot be ignored.

Editor’s Note: Yesterday, we received the following Open Letter from Terry McCormack, president and chief executive officer (CEO) of Affinia Group, Inc. In the letter, McCormack announces that the Michigan-based auto parts manufacturer plans to decrease its presence at this year’s AAPEX show in Las Vegas. While news of the company’s scaled-back presence may be news in and of itself for Affinia’s customers and competitors, McCormack points out that the decision speaks to the more significant shifts taking place in today’s business world – changes that cannot be ignored. – Amy Antenora, editor, aftermarketNews

“Understanding that our business is much more global in nature, Affinia Group has substantially modified its plans for AAPEX and Automechanika. Affinia’s foot print at the 2008 AAPEX show in Las Vegas will be much smaller than in past years. We plan to have a significant presence at AAPEX in the odd years, alternating with Automechanika, Frankfurt. This change in our approach to trade shows will have no effect on our participation in the AWDA conferences, where we still plan to have a full schedule of one on-one meetings with our channel partners.

“Normally, we probably would not call attention to a tactical change of this nature.

“However, we are living in a time of unrelenting change. Socially, politically, economically and business wise there are paradigm shifts in progress everywhere we look.

“We believe the automotive aftermarket is in the throes of a paradigm shift. The primary catalyst for this sea of change is globalization enabled by technology.

“The pattern of globalization crept slowly through incremental changes for many years, but in the new millennium it has exploded to the point of radically changing worldwide patterns of consumer behavior, perceived value and demand for commodities. The most striking examples of this new global economic reality are the extraordinary increases in energy costs that are significantly affecting driving habits. We believe this is a paradigm shift. There is no going back.

“What does all of this mean to Affinia and the rest of the automotive aftermarket? It means the incremental changes of ‘business as usual’ are no longer relevant or viable. For us it means we have to question and rethink virtually everything we do. The objective of this rethinking is to make certain that our resources are being applied properly. The methodology is simply to ask two questions about all of our activities:

1. Does this represent real value for our channel partners and customers?

2. As perceived by our channel partners or customers, is that value commensurate with the resources it consumes?

“When we came to trade shows, the answer to the first question was yes; but the answer to the second question was no. We cannot justify a major presence at AAPEX every year along with Automechanika in the even years. We can create more value by applying the required resources in other areas of our business.

“Our new approach to customer value will be centered around the following five basic areas:

* Product quality and innovation

* Unrelenting focus on servicing our customers

* Technology and data

* Keeping our channel partners and customers competitive

* Channel partner and customer growth

“All value adds will be scrutinized against these five elements and where changes are required, changes will be made. After all, real customer value is all that’s important in the new global economic reality.”

Terry R. McCormack

President and CEO, Affinia Group Inc.

After receiving the letter, aftermarketNews contacted the Automotive Aftermarket Industry Association (AAIA) and the Automotive Aftermarket Suppliers Association (AASA) – two primary associations responsible for hosting the show each year. Here’s what they had to say:

“ Affinia and its predecessor have been a cornerstone and loyal exhibitor at AAPEX for many years, so of course AAIA is disappointed to learn that they have decided to downsize their exhibit space at AAPEX this year, but we are pleased that they will still have a presence. Considering Affinia’s stature and prominence in the aftermarket industry, I’m sure this was a difficult business decision reflecting today’s difficult economic realities. Affinia has been and continues to be an active member of our trade association and a number of its top executives serve as volunteer leaders on the board and on committees ,” said Kathleen Schmatz, AAIA president and CEO.

“ AASA supports Affinia’s decision to carefully evaluate the deployment of resources to reflect today’s global realities. We are pleased that they will continue their participation at AAPEX, albeit in a modified format, and their commitment to enhancing real customer value in the new global reality ,” Steve Handschuh, president and chief operating officer, member satisfaction, AASA.