DETROIT - General Motors is asking antilock brake vendors to submit bids to outfit its G van and some sport-utilities in 2003, a huge chunk of business that has suppliers salivating.
The fierce competition could prove a major challenge for TRW Inc.'s LucasVarity division, which currently has a virtual lock on ABS contracts for GM light trucks.
The annual volume up for grabs is projected to be 550,000 units, according to one supplier source.
One contract will cover the replacement for GM's full-sized G van, which has a planned production volume of 150,000 units.
GM also is seeking bids for versions of its compact and full-sized sport-utilities to be equipped with yaw control. Production volumes for the upscale sport-utilities
are expected to total 200,000 units each.
GM declined to comment. Lu-casVarity spokeswoman Julie Ballesteros downplayed the news.
'It's standard GM practice (to seek quotes) on a new program,' she said. 'We're not concerned about it. We are involved.'
Yaw-control systems add sensors and software to the basic ABS. An onboard computer selectively can apply the brakes to avoid spinouts during turns.
Thanks to chronic price pressures, ABS is considered to be a commodity component with eroding profit margins.
To suppliers, yaw control is a tempting program because it adds content and profit to ABS.
Sources at all four major ABS suppliers - including Robert Bosch Corp. of Farmington Hills, Mich.; TRW LucasVarity of Cleveland; Delphi Automotive Systems of Troy, Mich.; and Continental-Teves Inc. of Auburn Hills, Mich. - confirmed they are bidding.
The contracts represent the most ABS business up for bids in several years, said Bosch CEO Robert Oswald.
'There are four major players in North America, each with a lot of installed capacity,' Oswald said. 'Whenever a big piece of business opens up, there's always a lot of competition.'
LucasVarity has had its troubles with GM in recent months. Earlier this year, GM recalled 2.4 million vehicles to fix the ABS. One source at LucasVarity said GM estimates the recall's costs will reach $80 million, a burden that will be shared equally by the automaker and the supplier.
The former Varity Corp. first gained some of GM's light-truck ABS business when it bought Kelsey-Hayes in 1989. The combined company merged with Lucas, then was acquired by TRW in February for $7 billion.
In the past, GM has opened up a supplier's business to competitive bidding, then used the quotes to pressure the existing supplier to cut prices. But Bosch's Oswald believes GM is serious about finding a second vendor to supply ABS for light trucks.
'GM has not had a recent history of playing that game,' Oswald said. 'If they open something up, it means they're looking for another source.'