"Past success is no longer a guarantee of future earnings," Ganguli said. "The industry itself is going to grow, but the supply base is going to change and just because the cost of parts per vehicle is going to go up, it does not mean a rising tide is going to lift all boats."

But the previous decade's successes are being evaporated this year. Every Southeast Michigan supplier has reported troubling earnings for the first half of this year. For example, Plymouth-based Adient plc reported a loss of $321 million in the second quarter, Detroit-based American Axle & Manufacturing Holdings Inc. reported a net income drop of more than 65 percent and Auburn Hills-based BorgWarner Inc. reported a net income drop of 37 percent. Even the hot Aptiv plc, which develops self-driving software, reported lower income, down 5 percent from the same quarter last year.

Crain's requested comment from several suppliers on restructuring plans and all declined or did not make an executive available.

And there doesn't appear to be any relief on the horizon.

"... we exited the second quarter with softer sales than anticipated and we expect this to continue to impact us in the second half of 2019," American Axle Chairman and CEO David C. Dauch said in a press release earlier this month.

The troubling market forces are likely to drive consolidation in the industry, Ganguli said, where suppliers are either on the hunt for stronger segments to add to their portfolio or will become part of someone else's.

"If you're in a commoditized sector, you're asking how you consolidate," Ganguli said. "How are you going to be the last one, two or three companies standing? Someone has to make axles, for example. Will it be you? The solution is to build scale, consolidate and be the cost leader or be ready to be consolidated."

Global supplier merger and acquisition activity is near record highs, according to PwC's 2019 Auto Supplier Consolidation study released last week at the Center for Automotive Research's Management Briefing Seminars in Traverse City. Global auto supplier deal values are expected to reach $44 billion in 2019, well above the average of $20 billion.

Most of the deals between July 2018-July 2019 were in the powertrain segment, followed by electronics systems, according to the study. For instance, Lake Forest, Ill.-based Tenneco Inc. closed on a $5.4 billion deal to acquire Southfield-based Federal-Mogul. The merger will result in two separate publicly traded companies.

The consolidation is driven by long-term outlooks of where market growth is going to occur. According to the Deloitte study, segments such as transmission and axles are expected to decline 6 percent and 10 percent, respectively, by 2025. Meanwhile, electric vehicle and autonomous vehicle sectors like electric drivetrain is expected to grow 306 percent, battery and fuel cell sectors by 266 percent and advanced driver-assistance systems and sensors by 190 percent.

Investments in these sectors is likely to ramp up in the wake of declining car sales, as suppliers position themselves for sustainability in a down market, Ganguli said.

"Capital and innovation is going to pick up and (an economic downturn) is going to force consolidation to happen faster," Ganguli said. "Suppliers will focus their business even more and that means divesting or acquiring."

But Dietmar Ostermann, U.S. automotive advisory leader for PwC, said this may prove fatal for many suppliers as they are preparing for a future that is anything but certain.

"We're asking whether (automakers and suppliers) are investing too much into electric vehicle and autonomous vehicle technologies," Ostermann said. "We've projected these investments have reduced (earnings before interest, tax, deprecation and amortization) by 2 percent. The economic viability of these investments is still 20 to 30 years out in our opinion. The only viable market is the robotaxi. Right now there's no private use case that pays off. This means there will be more significant cost reductions moving forward to justify these investments."

Ostermann believes these investments and the negative attitude toward car sales may force a downturn where otherwise one wouldn't exist.

"The industry seems to be on the verge of talking itself into a crisis," Ostermann said. "These investments have already caused (automakers) to initiate cost-reduction programs, putting enormous pressure on the supply base, despite sustained robust GDP growth in America. I don't believe we've ever seen vehicle sales decline with 3 percent GDP growth. It's not justified with the economics right now."

The strong technology push and rapid industry transformation has opened doors for smaller, atypical entrants into the market as the industry is increasingly reliant on outside knowhow, such as Bloomfield Hills-based Karamba Security Inc. and Troy-based Facton Inc.

Karamba provides end-point security for connected and autonomous vehicles to prevent cyber attacks that could enable or, worse, crash a vehicle. Current luxury vehicles have more than 100 million lines of code with autonomous vehicles expected to reach more than 300 million lines.

Karamba employs 40, only four in Michigan, but has already secured contracts with 17 automakers and large suppliers.

Misguided or not, the industry's quest to transform driving technology opened doors for the software firm and will likely make the firm recession proof even as car sales are slowing, said Ami Dotan, co-founder and CEO.

"Everybody realizes this industry is a slow-moving sector," Dotan said at the MBS conference last week in Traverse City. "But the ones that saw the vision were the automotive customers. It takes a long time, but once embedded these are long-term contracts. They don't get into the validation process every year. That provides us stability."

Facton, with most of its operations in Germany and four employees at its Troy office, provides costing software, allowing the industry to model out costs in the supply chain, purchasing and product development. The impending downturn may boost Facton's local operations, said CEO Alexander Swoboda.

"In the long run, this economic pressure is good for us," Swoboda said. "I just spoke with a vice president of sales at a supplier, and he said his major customer is asking for a 7 percent cost reduction. That's makes our pitch easier, even if cutting a check is a little more difficult."