As the auto industry globalizes, automakers increasingly resemble each other in product, production and management.
This is not quite so true with suppliers. Although a wave of mergers and acquisitions has thinned their ranks, suppliers retain distinct identities. This month, Automotive News International examines the various types of supplier companies and the executives who run them.
Some companies are relatively small family owned businesses that specialize in a few product lines. These companies are beginning to disappear in the United States, but they still survive in Europe, where suppliers have not consolidated quite so quickly. To illustrate this group, we profile Bosal, a German company that has been run by three generations of CEOs named Karel Bos. (see Page 30)
Some suppliers are essentially one-product companies - the result of an entrepreneur with a bright idea. One example is Gentex, a highly profitable U.S. company that makes self-dimming mirrors. (see Page 28)
Other companies have expanded into a wide range of components. One of the best examples is Lear Corp., the Michigan seat maker that now can design an entire vehicle interior. To do so, Lear borrowed heavily to finance several acquisitions in the 1990s. Its CEO, Bob Rossiter, now must reduce the company's debt and unload marginal assets. (see Page 28)
While suppliers such as Lear and Valeo used acquisitions to fuel growth, Japanese suppliers tend to rely on joint ventures and internal growth. Perhaps their reluctance to acquire other companies is partly because of the tradition of keiretsu - a Japanese concept where a cartel of suppliers is tightly linked to an automaker. Companies launched overseas operations to serve their main customer. Denso, for example, has followed Toyota around the world. Now Denso is the world's fourth-biggest supplier, selling parts to most major automakers. But Denso suffers from a corporate identity crisis. Should company President Hiromu Okabe remain inside the Toyota keiretsu, or should he be more independent? (see Page 31)
How does a supplier respond to crisis? Bridgestone could be a case study for future business schools. After a series of fatal accidents in the United States linked to tire blowouts, Bridgestone lost $510 million in 2000, the result of its decision to settle lawsuits with families of the victims. Worse, the company's Firestone brand may be permanently damaged. How will CEO Shigeo Watanabe respond to this crisis? (see Page 29)