"The focus the last couple of years was on cash, especially our debt position," Rossiter said. "I believe that will put us in a position to grow this business."
Reducing debt is important for Lear because it makes the company's stock a lower-risk investment, said David Leiker, an auto analyst at Robert W. Baird & Co. Inc.
"The risk of their business model is lessened because interest rates are lower," he said.
Lear's debt could be upgraded to "investment grade" during the year, Leiker said. It's one step away from that now. Baird's report on Lear forecasts further debt reduction of $800 million in the next two years.
The company projects ending 2003 with $400 million in free cash flow, up slightly from 2002, when it ended the year with $395 million. That puts shareholders in a better position to reap more benefits from Lear's $4 billion backlog of booked business in the next five years.
That includes the $825 million-a-year interior integrator contract for General Motors' future large- and luxury-car program.
The contract allows Lear to design, select suppliers and arrange delivery of all interior components for the Buick LeSabre and Cadillac DeVille starting in the 2005 model year.
The arrangement is a first for GM and Lear. That kind of contract is the reason Lear risked a high debt load to acquire other interior companies.
"We have a leading position in the fastest-growing segment in the automotive industry," said David Wajsgras, CFO. For the fourth quarter that ended Dec. 31, Lear reported net income of $118 million, or $1.76 a share, on sales of $3.76 billion. That compares with a net loss of $48.8 billion, or 76 cents a share, on sales of $3.41 billion in the year-ago period.