January 14, 2003 - The Detroit News - War Tension Worries Auto Supply Workers

January 14, 2003 - The Detroit News - New Job Orders Hang in Balance

January 13, 2003 - Tech Center News - Shelby Attains Quality Mark

January 13, 2003 - Macomb Auto Scene - Shelby Attains Quality Mark

May 27, 2002 - Crain's Detroit Business - Shelby Receives Patent

October 10, 2001 - The Romeo Observer - Shelby Raises Q1 Flag

October 12, 1998 - The Macomb Daily - Shelby Receives Contract to Supply Ford Motor with Fuel Filler Assemblies

The Detroit News - Tuesday, November 11, 2003

Romeo Part Manufacturer Favors Success

Shelby Enterprises battles pressures to cut prices while sustaining profitability, chief executive says
By Tim Keenan / Special to The Detroit News

ROMEO -- With auto parts makers under relentless pressure to cut prices, the Holy Grail might be easier to find than a profitable automotive supply contract.

Just ask Alan Demchick.
Demchick is CEO of Romeo-based Shelby Enterprises Inc., which makes fuel filler tubes and tubing for seat structures and air bags.
The company must quote prices low enough to win new business yet still make money,
and sustain profitability as customers demand price concessions over the life of a contract.
"It's a challenge every day for us to struggle to maintain ourselves in a profitable situation," Demchick said.
So far, Shelby is succeeding despite the constraints. The privately held company does not disclose financial results, but Demchick said the parts maker delivered 4 million units in 2002, expects to maintain that rate this year and increase sales by 1 million units in 2004.
Since 1985, the company's sales have grown an average 21.5 percent every year.
Shelby supplies fuel filler tube assemblies to Ford Motor Co. for the Econoline van, Freestar minivan and Escape sport utility vehicle, as well as to Isuzu Motors Ltd. for the Rodeo and Axiom SUVs.
Last week, DaimlerChrysler AG said Shelby will supply 200,000 fuel filler tube assemblies annually for an unnamed vehicle line, beginning with the 2005 model year.
Still, Shelby and countless other suppliers are facing difficult choices about sacrificing new business or backing out of existing contracts to protect profits.

"A lot of companies have turned business down because they can't very well go back to their shareholders and say, 'We took the business because we needed volume' or 'We needed the business,'" said Kevin Giannini, market analyst at CSM Worldwide, an automotive consultant in Farmington Hills. "If the business isn't profitable, it isn't profitable."

Suppliers typically don't reveal that they've turned down business.
But last week, Troy-based Collins & Aikman Corp. said it gave up a contract to make interior parts for two DaimlerChrysler cars.
Last month, Dana Corp. of Toledo, Ohio said it declined to produce frames for the 2006 and 2007 Ford F-250 and F-350 pickups.
And in December 2002, Tower Automotive Inc. in Grand Rapids said it would not supply frames for the next edition of the Ford Explorer.
All three companies said that they would not be able to make enough money on the business to make it worthwhile.

Demchick said Shelby is facing two sticky situations.
"One of our customers wants to give us a fuel-filler tube job," he said. "It's an attractive number as far as units and it fits right into what we would like to have, but at this point we cannot go any lower (in price) without jeopardizing our business.
"We just have to take it upon ourselves to have restraint in our growth."

And Demchick said Shelby is at risk of losing contracts it already has because the supplier may not want, or be able, to yield to pricing pressures.
Automakers often require parts makers to lower their prices by as much as 5 percent each year. That becomes difficult when a parts maker wins the business based on a low bid.
"We're in a squeeze between our suppliers and the customer," Demchick said. "We do go in with the lowest competitive price and it is kind of a hard thing to look at when there are continuous down-cost requests."
Giannini said the cost pressures are even more of a burden on a company like Shelby, which sells a low-tech commodity-type product where price is a major point of distinction.
Still, Demchick said Shelby is set up to excel in the difficult environment.

"We're an extremely lean company," he said. "We don't have layers of management. We use state-of-the-art equipment such as robotic technology and try to eliminate as much operator error as possible.

"From the top down, we communicate very openly and rapidly if there are any customer concerns.

"We don't have to set up a meeting in two weeks to discuss long-term strategies to reduce costs. We work on a daily basis to do that."

Tim Keenan is a Metro Detroit free-lance writer.

The Detroit News - Tuesday, January 14, 2003

War tension worries auto supply workers

Some say it may disrupt recent uptick
By Tim Keenan / Special to The Detroit News

ROMEO -- Job security remains a concern of workers inside the plants of Macomb County's automotive suppliers, despite signs that the industry has stabilized.
Tensions in the Middle East and in North Korea, coupled with overseas competition, continues to make workers nervous.
"I see the slowdowns," said Janet Gates, 46, of Shelby Township, plant superintendent at Shelby Enterprises, a Romeo-based company that manufactures fuel-filler tubes for sport utility vehicles such as Ford Motor Co.'s Escape and Mazda's Tribute.
"I'm sure (Sept. 11) had a lot to do with that. I'm concerned. I think that's a normal reaction."
Simon Wells, 35, of Imlay City is a line leader at Shelby.
"I've paid more attention to (war and terrorism threats) since I've been here," she said. "It certainly concerns me."
Executives working for Macomb's auto suppliers are upbeat, but remain cautious. This, after all, is an industry with worries about profitability despite just closing the books on the fourth-best year in more than a century of selling automobiles.
"We've rebounded pretty well," said Alan Demchik, chief executive of Shelby Enterprises.
The company's ongoing success, he asserts, is "a combination of the vehicles we're on and the products we provide."
Shelby, one of only four fuel-filler tube suppliers in the car industry, has seen a 21.5 percent average annual uptick in sales since it opened in 1985 -- even in 2001 and after the Sept. 11 terrorist attacks.
Suppliers were riding high during the record-breaking sales years of 1999 and 2000, but took hits in 2001 after Sept. 11 and even before that when vehicle programs were canceled or delayed. Metro Detroit suppliers have and in some cases still are rebounding from 2001.
Shelby Enterprises is among those bouncing back. With 100 employees and very few levels of management, it considers itself lean and fast in responding to challenges and says quality is the X factor.
"Everything we do is state-of-the-art," said Pat O'Connell, Shelby's sales manager.
A traditional worry -- foreign competition -- remains on the minds of Macomb workers such as James Massey, 49, of Eastpointe. Massey has been a quality control inspector for 21 years at LM Gear Co., a Chesterfield Township manufacturer of gears for car seats.
"The biggest thing is the problem with the jobs going overseas," Massey said. "You never know when the jobs are going to leave here. I worry about that a lot. It's just not very comfortable."
Shipments from LM Gear dropped 11.5 million units in 2001 to 23.8 million gears sold to customers that included Johnson Controls Inc., Lear Corp. and Visteon. But LM Gear recovered 5.5 million of those sales last year, selling 29.3 million gears, and expects to gain a few million more in 2003.
"We didn't do well in 2001 at all," said Mike Wheeler, chief executive of LM Gear. "In 2002 we improved somewhat. We got back about 50 percent of what we lost in 2001."
Canceled or delayed new vehicle programs bit into LM Gear's business even before Sept. 11. After that tragic day, even more business went away.
Further pressure comes from automaker requirements that every part delivered be defect free -- a high order when mass-producing millions of small parts. LM Gear was forced to invest in expensive, automated sorting machines that will identify defective parts before they get shipped to automaker assembly plants.
Joe Krueger, 36, of St. Clair Shores works on the LM Gear assembly line. Work has been steady and he likes it that way.
"We're doing well," Krueger said. "We haven't worked less than 50 hours a week in a year. With all the incentives and cars selling, we're busy. We just hired 10 people."
About 90 percent of RCO Engineering's business is automotive. The Roseville supplier of specialty and prototype car parts and engineering services is getting its shot in the arm from new business that includes a deal to make a side-impact air bag system component for Tier 1 supplier Autoliv.
RCO's advantage is that it works on vehicle programs two to five years in the future rather than vehicles currently in production. That makes it less susceptible to changes in consumer buying patterns.
It also has 160 computer-aided design stations, giving the company in some cases more design capability than its customers, where about half of RCO's 600 employees are contracted to work.
"When times get rough, the first thing automakers want to do it get rid of people and the easiest people to get rid of are contract people," said Norm Starr, general manager of RCO.
Tim Keenan is a Metro Detroit free-lance writer.

Back to Top

The Detroit News - Tuesday, January 14, 2003

New job orders hang in balance

But most suppliers remain optimistic for the coming year

By Tim Keenan / Special to The Detroit News
ROMEO -- People who work for automotive suppliers in Macomb County, wary of a bumpy economy and threats of terrorism and war, are skittish -- but optimistic -- as 2003 begins.
"I hope that what's going on in Iraq and North Korea doesn't get too out of hand," said Simon Wells, 35, a line leader at Shelby Enterprises in Romeo, a manufacturer of fuel-filler tubes.
"I know people react quickly to national and international situations, and I want people to keep going to (auto) dealerships."
Potential new business with Honda, Toyota, Nissan, DaimlerChrysler and TRW would help Shelby Enterprises meet its financial goals and keep employment steady.
"We've grown, on average, 21.5 percent every year since we started the business in 1985 and we're targeting that for the foreseeable future," said Alan Demchik, Shelby's chief executive.
Beverly Jones, 42, of Almont, a line leader at Shelby, expects the company to keep succeeding, despite the challenges. "People are always going to need vehicles, and we can't seem to make our products fast enough," she said.
Barring an international crisis, Joe Krueger of St. Clair Shores expects 2003 to be a good year. He is an assembly line worker at LM Gear Co. in Chesterfield Township, which makes drive gears for car seats.
"I don't see any slowdown," Krueger said. "In our particular business, it's looking good."
Norm Starr, general manager at RCO Engineering, a Roseville-based parts maker for niche vehicles, is "cautiously optimistic."
Buoying RCO's hopes are the number of low-volume, niche vehicles on drawing boards right now.

Tech Center News - Monday, January 13, 2003

Shelby Attains Quality Mark
Zero Defect PPM Rating

By Tim Keenan
Tech Center News

Ask the automakers and they'll tell you that the best suppliers are those who provide defect-free parts.
Low prices are helpful, but consistently perfect pars are every supplier's goal.
Shelby Enterprises of Romeo has achieved that goal. Its defective parts-per-million (PPM) rating is zero while increasing sales 22 percent over 2001 figures. Shelby, founded in 1985, manufactures fuel filler pipes, fuel tank assemblies, vapor tubes, vents, gas guides, spuds, fuel valves, breather tubes, brake cable tubes, antenna brackets, seat adjusters, and other automotive structural tubing components for Ford Motor Co., Isuzu and Autoliv. With a mere 100 employees, the company can more easily control its quality and be more responsive to quick customer changes.
"It's a newer company and everything we do is state of the art," said Pat O'Connell, sales manager at Shelby Enterprises. "We're progressive and very responsive to customer requests.
"Larger companies have more layers of management to go through to get things done," he continued.
"We don't have that."
The company's research and manufacturing capabilities allow it to design, develop and manufacture virtually any type of metal tubing component, with virtually no defects.
"There is error proofing in all systems in every single process," said O'Connell who added that Shelby's zero-defect PPM rating compares to an industry standard of 200.
Shelby's manufacturing success is a result of Japanese-invented "poka- yolks," which are employee work areas designed to make it impossible to assembly a part improperly.
Tables, for example, have groves into which parts fit and which prevent other parts from being connected incorrectly. Other workstations are equipped with sensors that monitor a module's components. If they are not in the right place, it will not move to the next position on the assembly line.

Macomb Auto Scene - Monday, January 13, 2003

Shelby Attains Quality Mark
Zero Defect PPM Rating

By Tim Keenan
Tech Center News

Ask the automakers and they'll tell you that the best suppliers are those who provide defect-free parts.
Low prices are helpful, but consistently perfect pars are every supplier's goal.
Shelby Enterprises of Romeo has achieved that goal. Its defective parts-per-million (PPM) rating is zero while increasing sales 22 percent over 2001 figures. Shelby, founded in 1985, manufactures fuel filler pipes, fuel tank assemblies, vapor tubes, vents, gas guides, spuds, fuel valves, breather tubes, brake cable tubes, antenna brackets, seat adjusters, and other automotive structural tubing components for Ford Motor Co., Isuzu and Autoliv. With a mere 100 employees, the company can more easily control its quality and be more responsive to quick customer changes.
"It's a newer company and everything we do is state of the art," said Pat O'Connell, sales manager at Shelby Enterprises. "We're progressive and very responsive to customer requests.
"Larger companies have more layers of management to go through to get things done," he continued.
"We don't have that."
The company's research and manufacturing capabilities allow it to design, develop and manufacture virtually any type of metal tubing component, with virtually no defects.
"There is error proofing in all systems in every single process," said O'Connell who added that Shelby's zero-defect PPM rating compares to an industry standard of 200.
Shelby's manufacturing success is a result of Japanese-invented "poka- yolks," which are employee work areas designed to make it impossible to assembly a part improperly.
Tables, for example, have groves into which parts fit and which prevent other parts from being connected incorrectly. Other workstations are equipped with sensors that monitor a module's components. If they are not in the right place, it will not move to the next position on the assembly line.

Crain's Detroit Business - Monday, May 27, 2002

PATENTS Shelby Enterprises Inc., Romeo, has received U.S. Patent 6,330,893 for an upper fuel-filler metal assembly fabricated as a deep-drawn stamping.

Back to Top

The Romeo Observer - Wednesday, October 10, 2001

Quality Flag Raises. Shelby Enterprises located in the Romeo Industrial Park last month held the raising of the Q1 flag that signifies that the firm is one of the best manufacturing facilities in the business and is recognized industry-wide as the mark of supplier quality excellence. Ford Motor Company presented Allen Demchik, CEO of Shelby Enterprises, Inc., Romeo, the Q1 Award. The 18-month process recognizes quality achievement at the manufacturing site level. Karen Hanson, a Shelby representative, said that "Q1 stands for everything Ford and its suppliers take pride in: excellence, consistency, consumer satisfaction and a drive to achieve more and more each passing year."

The Macomb Daily - Monday, October 12, 1998

SHELBY ENTERPRISES of Romeo has received contracts to supply fuel filler assemblies for Ford Motor Co. vehicles, company President Allen Demchik announced. Shelby Enterprises, founded in 1985, manufactures steel tubular assemblies and components for the automotive industry.