Foreign firms advance on list of OEM suppliers
By Robert Sherefkin
Automotive News
Following a decade of spinoffs, meg-amergers, acquisitions, grand expansions
and occasional retreats, the pecking order for North America’s auto suppliers
has a distinctly new look: Americans no
longer are running the show.
For the first time, a company based
outside the U.S. is the largest supplier
of parts to auto makers and other suppliers’ North American factories. Canadian parts giant Magna International
Inc. has elbowed its way past perennial
No. 1 Delphi Corp. as the largest supplier to North America, based on 2007
sales.
Four other foreign-headquartered sup-
as China the centerpiece of its global
growth strategy.
The annual ranking is based on sales
of original-equipment parts to auto makers and other suppliers in North America. The bulk of the data come directly
from the companies, but in some cases
the sales numbers are estimated.
Some of the companies that suffered
the greatest sales drops last year can’t
blame falling Detroit company sales. For
some, the cause was a retreat from
grandiose growth plans.
Take Lear Corp. It slipped a notch to
the No. 4 position after its sales declined
26.6 percent to $7.19 billion. Last year
Lear dumped its money-losing North
American interior trim businesses.
3 big gainers
In dollar terms, the three largest sales
gains this year were by foreign suppliers: Continental, Robert Bosch L.L.C.,
and Denso International America Inc.
Acquisitions often involve two steps
forward and one back. Take Continen-
tal. After boosting sales with the Siemens VDO acquisition, it now is trimming because of overlap. Kozyra said his
North American operations could shed
“a few hundred” jobs.
“We’re slimming down where we have
duplication in efforts,” he said. But
growth plans means not everyone in duplicated operations will be let go.
“We have a strategy of redeploying technical people to other parts of the company
that are growing, such as hybrid drive,
which has a need for more engineers.”
Top rubber-related
auto OEM suppliers
Overall OE sales 2007
rank Company (in millions)
7) Continental A.G. 5,205
8) Dana Corp. 4,797
20) Tenneco Inc. 2,337
32) Goodyear 1,755
33) DuPont Automotive 1,743
39) Cooper-Standard
Automotive 1,531
43) Metaldyne Corp. 1,341
44) Federal-Mogul Corp. 1,313
48) Toyoda Gosei
North America 1,160
49) Bridgestone Americas
Holdings Inc. 1,125
50) Eaton Corp. 1,120
52) Michelin North
America Inc. 1,109
Source: Automotive News Top 150 suppliers in
North America
pliers have displaced U.S.-based rivals,
giving foreign companies half of the top
10 spots.
In 2006, foreign-based suppliers took
just three of the top 10 spots. In 1997,
only two foreign companies made the
top 10.
An analysis of the annual list of the
top 150 North American original-equipment suppliers—produced by
Automotive News, a sister publication of Rubber
& Plastics News—shows that the leading foreign-based suppliers are growing
quickly through acquisitions, the same
way U.S. companies grew during the
1990s.
Continental A.G.’s purchase last year
of Siemens VDO catapulted the German
supplier to No. 7, from No. 18 in 2006.
Now, William Kozyra, Continental’s
North American CEO, must make the
acquisition work. But if the experience
of American suppliers is any guide, it
won’t be easy.
Decade of change
A decade ago, U.S. suppliers held
eight of the top 10 slots. But failed deals
and financial engineering cost them position. And the Detroit-based auto makers’ plunging production volumes slam-med U.S.-based suppliers that rely
heavily on those customers.
Another factor: Many U.S.-based suppliers lost North American sales as they
followed auto maker customers on overseas expansions.
Delphi, for instance, is in Chapter 11
reorganization in the U.S. but not overseas. So it has sold off North American
operations, while making markets such
