Auto Suppliers Turn to Medicine

Detroit News (2/2, Rogers) – Auto parts makers, which have watched their business prospects nearly flat-line in recent years, are setting their sights on an industry with a stronger pulse -- health care. Many Michigan-based suppliers are turning to the booming medical device market to buffer against declining orders from Detroit's Big Three automakers, retooling their production equipment to make everything from heart stents to hospital bed components.

Creative Technology Services, a medical device manufacturer in Canton, reports being "flooded" with calls in the last six months from auto suppliers seeking advice on how to make the switch. "Years ago, we would have gone to see suppliers and not gotten a second look," said Stuart Kerr, the company's executive vice president. "But now you've got auto suppliers happy to diversify into something else."

For auto suppliers, crossing over to medical goods has advantages and challenges. While it's a fast-growing industry, fueled by an aging population and rising use of medical services, it's also strictly regulated by the U.S. Food and Drug Administration. Orders are typically smaller in volume than for auto parts and retooling machinery to make medical devices is often pricey. "It's a big learning curve for them, but once they can master that, then they can usually make a pretty good go of it," said Stephen Rapundalo, president and CEO of MichBio, an Ann Arbor trade organization for life science firms.