Tenneco Automotive is reducing and relocating its manufacturing footprint in Europe.
"Nothing is sacred anymore," said Hari Nair, executive vice president and managing director of tenneco's European operations.
In the long term, Tenneco's restructuring strategy will affect what it manufactures. The supplier is re-evaluating the kind the components it produces in-house.
"We may not radically restructure what we do today, but we will certainly change our views of how we invest for the future," said Nair.
Tenneco is being forced to adjust to the dec-lining aftermarket for exhausts in Europe.
"We are no longer going to distinguish capacity as original equipment or aftermarket," said Nair. "We are going to increase flexibility and optimize capacity utilization."
Tenneco has announced it will close its Denmark plant and halve capacity of its UK plant.
Tenneco's French exhaust operations have been cut from three plants to one, and its Swedish plant has been shifted from aftermarket toward original-equipment production.
Tenneco closed exhaust warehouses in Romania and Madrid, Spain. And muffler box manufacturing has been consolidated into one low-cost plant in Poland.
"But there is still too much capacity in the industry," said Nair. "We will continue to monitor demand versus supply and take action as we need it."
The bulkiness of complete exhaust systems limits how international the final assembly process can be, he added.
Tenneco is making its just-in-time delivery operations as flexible as possible and making parts manufacturing operations regional when it can.
He said ride products such as shock absorbers are more suitable for regional than global consolidation.
Said Nair: "Scale has a greater value because the core processes are very capital intensive and the products are easier to ship."