Gentherm CEO vying for EV interior dominance

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Phil Eyler51 year old man president and CEO of Gentherm Inc., claims that the battery-powered vehicles of the future won’t be differentiated by what’s under the hood, but by what’s inside the cabin. More than power and handling, Eyler said, customers will care about comfort solutions, such as heated seats and even lumbar massage systems, both of which are part of the Northville-based supplier’s portfolio after its recent acquisition. from the German supplier Alfmeier Präzision SE. However, heating and cooling electric vehicles, which lack the waste energy of gas engines, poses significant technical challenges. Eyler thinks Gentherm can capitalize.

The following conversation has been condensed and lightly edited for clarity.

  • What was your background in manufacturing?

Well, I went to Purdue for my mechanical engineering degree and started my first job outside of school at Siemens, which at the time had a sort of rotational engineering program where I I was lucky enough to be admitted. So I spent the first three years of my career alternating between different roles, and one of them was in manufacturing. So I kind of got my feet wet in my early twenties in the making and really fell in love with it. I love technology and I would say the ability to see your day to day work, make a difference to the business, and the adrenaline of manufacturing as well. I left Siemens after about four years and joined Harman, and spent my early years at Harman in manufacturing. I had the good fortune, at around 29, to open a new factory for Harman and became a factory manager at that age. So it was a really exciting trip for me.

  • How did you come to Gentherm?

I had no intention of (leaving Harman) at the time…but a recruiter contacted me about the opportunity. And I had spent most of my career at Harman in high tech, and thermal management, at least in my opinion at the time, was something that hadn’t seen a big change on the technological plan. Many of my automotive colleagues had already spoken about the challenges with the arrival of electric vehicles and how managing human temperature in the cabin was a significant challenge in the electric vehicle space.

  • Can you tell us a bit more about this challenge?

Absolutely. Yeah I mean the fundamental concept behind heating and cooling a car has traditionally treated the interior cabin like a house, basically trying to bring all the air temperature inside the cabin up or down at a certain temperature range. And that takes a lot of energy. But when you’re using an internal combustion engine, there’s a lot of waste energy that’s quite easy to tap into the engine itself. So, you know, you get kind of a free supply of power… but with an electric system, trying to do the same thing to heat and cool the whole cabin drains a huge amount of battery charge.

  • How are Gentherm and other interior suppliers trying to solve this problem?

So the approach that I saw taken to the next level was to focus on, instead of heating and cooling all the air in the cabin, heating and cooling the actual passenger or driver one at a time … So adding software and algorithms that take into account our fundamental science that we have here at Gentherm, which is called thermo-physiology. We also have a medical division in our business, and really what I would say, the scientific essence of our business is understanding how a human achieves thermal comfort in the most efficient way, and it’s really not necessarily related at air temperature. Your body has all kinds of different heat receptors. They are more concentrated in the back of the neck, certainly around the vital organs which are very sensitive. And so you can apply cooling and heating to specific parts of the body and achieve comfort in a much more efficient way.

  • Who are your customers and competitors?

We have almost every global automaker you can think of. GM is actually our biggest customer… We are sort of considered a Tier 2 direct supplier for a lot of the products that go into the seat. So basically the automaker will come to us, discuss what kind of technology they want. We’ll negotiate that deal, the pricing and purchasing negotiations, and then they’ll decide what product they want and who they want from the supplier, then they’ll go to a seat manufacturer and tell them they’re going to use the Gentherm Product. .

Kongsberg is one (competitor). Kongsberg has just been acquired by Lear. There is a company called IGB, a German company (also acquired by Lear). There’s a company called AEW in China, and then there are several smaller competitors that might provide one type of product or another. We are by far the world leader in terms of market share.

  • So, Lear is trying to vertically integrate these specialty comfort products. Is it hurting your business?

I think their goal is definitely to find opportunities to integrate some of the core thermal products themselves. Just to put things in perspective, I’ll give you an idea of ​​our business with Lear. They make up less than 15% of our business, and 70% of that 15% actually comes directly from the automaker. Lear therefore does not decide on this product. But on the remaining 30% of the 15%, that’s probably the target area they’re looking for, to integrate it vertically. So there might be some change in this product, but on the other hand, Kongsberg actually supplies many other seat manufacturers, and so you can imagine that opens up opportunities for us because we’re independent. You know, I think what’s interesting for us is that we’re still by far the biggest market leader as an independent vendor. In fact, we like this position. Net-net, I think it’s going to be more of an opportunity than a risk.

  • Is the company still facing supply chain issues and are you concerned about vehicle demand?

It’s still a challenge, but it’s better. And, you know, I’m optimistic that it will be a gradual improvement over the next few quarters, but that’s not behind us. It’s great to see improvements starting to come. And we see it everywhere. You know, the flow of orders from customers and the supply of our own suppliers has improved. In terms of demand, I’m pretty optimistic… I feel pretty good that we’ll have a good run once the supply starts to open up even more.

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