On the surface, there doesn’t seem to be much in common between the electrical architecture of a vehicle and its seats. Ray Scott, who took over as CEO of Lear Corp. on March 1, he doesn’t see it that way.
With car-sharing and autonomous vehicles on the horizon, Scott, 52, believes technology and changing ways of using cars will require convergence of seats and smart technology. This is exactly Lear’s strategic game for the future: driving the electronic part of his global business while developing smart seats that combine it.
Scott, a 30-year veteran of Lear, spoke with Lindsay Chappell and Richard Truett about Crain’s sister Automotive News publication at Lear’s headquarters in Southfield.
Have you ever imagined that the industry would change at such a rapid pace?
No, I had never seen it that way. And we talk about that as a team. The door is open and the amount of budgets we receive in electrification, connectivity and reconfiguration, all these areas in which we participate today: we talk about opportunities. It’s a lot of opportunities to manage and you need to make sure you choose the right strategic sites, make sure you’re successful with the launches, and that you can manage the growth rate in a reasonable way to continue to deliver quality.
Our backwardness [booked business] right now it’s approaching $ 4 billion, the largest we’ve ever had.
How does Lear define delay?
We measure lag differently from many of our competitors. We measure it as net business contracts. No hypothetical desires or thoughts or high probability or multi-year contracts. It’s just a one-year contractual look at the business. We are very sure of what we have booked. We are looking at the amount of budgets we have in progress. They have tripled in the last six to eight months in the areas of connectivity, convergence and electrification.
There are estimates across the map about how quickly vehicle buyers will adopt electric vehicles. What is your forecast?
I think the adoption of electric vehicles will be faster than most estimates. When you have that feeling, that instant torque feeling, it’s a completely different kind of drive. I haven’t heard anyone who doesn’t like it. And I think the younger generation will take it.
Where will Lear be in five years?
We will be a leading company in technological innovation. I believe that the core of our company, what we consider to be true, is our operational excellence. That’s what always made Lear great and that will keep him going. We are very good operators and we do a great job launching products for our customers.
What we are seeing now is this transition coming from some of our acquisitions and some of the target companies we have followed, such as Arada Systems and EXO Technologies. For example, when we bought the Antolin Group seat unit, this gave us a reconfiguration look.
Can you give us an example?
The Antolin Group seat engineers designed rails on the floor of the vehicles for a customer that will be launched in a couple of years and we created an electric seat rail. Therefore, the seats will move on a motorized lane. You’ve seen seats where the harness hangs. We have now integrated the technology into the rail system so that you no longer need cables.
In a world of reconfiguration with mobility and even autonomous vehicles, where you can move seats and turn vehicle seats, it is crucial. And we have created it through the technology we have with our electronic systems.
How will Lear differ from Adient or other competitors?
There is no seating company in the world that has a division and seats of electronic systems, and what we call convergence. With the exception of craftsmanship and quality, the seats haven’t really changed. The current seats are quite passive in the vehicle. But I think the seat will become a smart device. It is the first point of physical connectivity. Therefore, when a consumer gets up in a seat, we have designed and designed headrests that allow consumers to individualize their internal space.
A central stack right now is essentially this: “I have to listen to this music, I have to make this phone call and listen to this text message.” We know who the call is coming from. But now we will control it through the seat. With all the technology we have in our group of electronic systems, you can access a seat and listen to your individual music, you can receive an individual call and receive your individual text messages. Think about this with mobility and shared travel. One of the complaints is that you have to adapt to everyone else’s preferences because of the center stack.
In what other ways will seats evolve in the age of mobility and shared travel?
Heating and cooling. I’ve learned that when consumers go into mobility and share cars, they’re almost nervous asking the person next to them, “Hey, don’t you mind if I increase the heat?” Or cool the cabin. Well, we can heat and cool the occupants according to their own preferences in the seating system. Using our Bluetooth features, you can set these preferences from your phone. So when you get to the seat, it will set you up for proper posture and comfort, your heating and cooling, and your musical preferences.
What roles do car seats play?
This is the final game. We see that booths change drastically and not just by personal preference. That’s what you want to do in this space.
There will be people who want to rest and sleep and others who want to work. Currently, in the seats, we have smart tracks and smart recliners that are no longer passive. Because technology has advanced so rapidly, we can now detect when a vehicle is approaching from the rear or front at a certain pace. We may notify the occupant that something changes abruptly and move the seat forward or move it out of a dangerous position in the event of a collision.
We are also working on health surveillance systems. We have Bluetooth functions. We have audio features. I have no doubt he will have smart seats.
How far are these innovations?
We are currently in development programs with two or three clients: 2022-2023. It is more about due care and process in the tests and validations we go through. But with the intuitive seat, we are creating a business that does not yet exist. I still have no requirements for a client.
What percentage of sales will go to R&D and increase that amount?
Yes. It’s so much more than it used to be. It depends on the product. In our electronics business, it is between 8 and 9%. The wiring is much lower, about 3 percent. Capacity is 2 percent. We are spending more than we have spent before on pure R&D.
What face of the house (seats or electronics) does the technology come from to develop these innovations?
The convergence I’m talking about is playing perfectly with our strengths on both sides. With EXO and Arada, we have amazing features with our gateway modules, which are some of the most advanced technologies in the vehicle. They are the communication devices. They do all the communications. We need to have skills and capabilities in cybersecurity, GPS monitoring, network vehicle software update, vehicle to vehicle and airborne transmission.
If you talk about safety inside the vehicle with the occupant in the seat, there is a very complementary overlay. There are capabilities we need to continue on this journey in electrification, connectivity, and convergence: our three growth engines. Each of them must have its own return on investment capital.
Is electrification the sweet spot for Lear’s growth?
Some of the biggest opportunities for accelerated growth are electrification. Look what’s going on right now. It is estimated that 40% of all vehicles will be electrified by 2027. We do 48 volt architectures and supply all traditional and high power wiring. We make battery chargers and some of the best technology in the industry, 22 kilowatt battery chargers. Our first real show was the Chevrolet Volt. We had $ 2,200 of content on that.
What other acquisitions does Lear need to take advantage of the convergence you want?
While we are not desperate for any acquisition, we are constantly looking for inserts. We have probably analyzed between 25 and 50 companies, of purely engineering companies that adapt, by convergence, electrification and connectivity; and in other manufacturing companies that could provide us with a special capability or allow us to diversify into a customer or a region.
When do you think the industry will see level 3 and 4 self-driving cars?
If you mean self-driving vehicles that can operate in unclosed areas, I would say 2035. I think it’s here. There are many obstacles. In a controlled environment, you will obviously see them much faster.