Cameron Auto Parts
Cameron Auto Parts
Executive Summary
Cameron Auto Parts was founded in 1965 in Canada by the Cameron family to seize opportunities created by the Auto Pact (APTA) of 1965 between the United States and Canada. The APTA allowed for tariff-free trade between the Big Three American automakers and parts suppliers and factories in both countries. The one caveat in the APTA to qualify for the zero-tariff trade was that companies must maintain assembly facilities on both sides of the border. Cameron Auto Parts specifically manufactured original equipment parts (OEM) such as small engine parts and accessories based upon design specs created by the Auto manufacturers and then sold these parts to the auto makers.
Alex Cameron took the reins in 2001 and was immediately faced with a financial crisis. Sales in 2000 had dropped to $48 million and were only $18 million for the first six months of 2001. Cameron lost $2.5 million in 2000 and the same amount in the first six months of 2001. This decline was primarily due to declining auto sales of American cars and trucks and the increased presence of Japanese automakers. Market forces were driving the American firms to find ways to cut costs and modernize plants. Cameron used $10 million of its $12 million credit line to reinvest back into the firm by modernizing equipment and computer-assisted design and manufacturing systems. However, Cameron did not have its own design engineering team and relied on specs from the Big Three automakers for its products. This left Alex Cameron with an uneasy feeling that expansion into product design was essential for the long-term survival of the firm. In mid-2001, Cameron took the steps necessary to design and develop its own parts line. Cameron hired four design engineers and, by 2003, came up with a flexible coupling idea that would entice international buyers and not just the Big Three automakers.
Cameron was then faced with the dilemma of how to market and sell the product.
Executive Summary
Cameron Auto Parts was founded in 1965 in Canada by the Cameron family to seize opportunities created by the Auto Pact (APTA) of 1965 between the United States and Canada. The APTA allowed for tariff-free trade between the Big Three American automakers and parts suppliers and factories in both countries. The one caveat in the APTA to qualify for the zero-tariff trade was that companies must maintain assembly facilities on both sides of the border. Cameron Auto Parts specifically manufactured original equipment parts (OEM) such as small engine parts and accessories based upon design specs created by the Auto manufacturers and then sold these parts to the auto makers.
Alex Cameron took the reins in 2001 and was immediately faced with a financial crisis. Sales in 2000 had dropped to $48 million and were only $18 million for the first six months of 2001. Cameron lost $2.5 million in 2000 and the same amount in the first six months of 2001. This decline was primarily due to declining auto sales of American cars and trucks and the increased presence of Japanese automakers. Market forces were driving the American firms to find ways to cut costs and modernize plants. Cameron used $10 million of its $12 million credit line to reinvest back into the firm by modernizing equipment and computer-assisted design and manufacturing systems. However, Cameron did not have its own design engineering team and relied on specs from the Big Three automakers for its products. This left Alex Cameron with an uneasy feeling that expansion into product design was essential for the long-term survival of the firm. In mid-2001, Cameron took the steps necessary to design and develop its own parts line. Cameron hired four design engineers and, by 2003, came up with a flexible coupling idea that would entice international buyers and not just the Big Three automakers.
Cameron was then faced with the dilemma of how to market and sell the product.