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Agreement bars Delphi, Visteon

Exclusivity clause prohibits sponsorship of Detroit auto show

DETROIT - The world's two largest auto suppliers will be left in the cold in January when the Detroit auto show increases supplier participation.

Delphi Automotive Systems Corp. and Visteon Corp. are not allowed to become sponsors of the 2002 North American International Auto Show, which is organized by the Detroit Automobile Dealers Association.

The reason: Johnson Controls Inc. has exercised its contractual right to block core product competitors from being show sponsors, locking out companies such as Delphi, Visteon, Lear Corp. and Magna International Inc.'s Intier Automotive.

The exclusivity clause is a hindrance in the show management's plan to increase supplier participation by creating a supplier showcase in the basement display area of Cobo Center for the 2002 show. Delphi and Visteon had been interested in being part of the showcase.

Exclusives promised

Contracts for official sponsorships signed before the summer promised suppliers exclusivity based on their core products. The contract with Johnson Controls, a show sponsor since 1995, expires after the 2002 show.

Other suppliers protected by this rule include Michelin North America Inc., coatings and glass supplier PPG Industries Inc., electronics supplier Yazaki North America Inc. and transmission, steering and suspension supplier ZF Group NAO.

An official sponsorship, the highest level, allows product exclusivity in defined areas. A display sponsorship, which permits a company to showcase its products or services in Michigan Hall, does not promise exclusivity.

"If we were like the Frankfurt auto show and had buildings and another 100,000 square feet at Cobo Center, it's very likely we would structure this whole program differently," said Tavi Fulkerson of Event Management Corp., a Grosse Pointe Farms, Mich., group that handles the show's supplier relations. "There's a very limited amount of space."

The rule has been in place since 1994, but it is especially relevant because the 2002 show will be the first time suppliers have been given a sponsorship option that allows them to exhibit in the basement. The space opened this summer when show management decided to move the food court to Cobo Arena.

NAIAS LLC, which organizes the show, last summer sent a letter to suppliers, including Delphi and Visteon, inviting them to submit a proposal for sponsorship consideration. Delphi, interested in reaching its customers' purchasing and engineering executives and displaying its consumer products, submitted an application, which it later withdrew.

"Restrictions were placed on which products we could show, and those restrictions precluded our participating fully in the show in the way we would have liked," said Steve Gaut, spokesman for the Troy, Mich., supplier of steering, interiors and electronics.

Letter detailed rules

But the letter sent to Delphi and other suppliers spelled out the exclusivity rule, Fulkerson said.

Visteon was barred from sponsorship because of Johnson Controls' stronghold on interiors displays.

John Love, president of Event Management, said show organizers, not sponsors, make the decisions on sponsorships. Johnson Controls spokesman Bill Dawson would not comment.

This is not the first time Visteon was excluded, Love said. Its sponsorship request previously was declined because dealers considered its parts distribution system a competitor.

Love says the rule will be reviewed next year. "I think the show is indicating they're willing to look at other models and other considerations beginning in 2003."

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