When Wall Street looks at the auto supplier segment these days, it sees a money pit. But Wilbur Ross smells money.
The New York investor's growing love affair with the auto supply business kicked into full gear last week with word of his investment group's planned $100 million acquisition of Collins & Aikman Corp.'s European interior plastics business. The deal is subject to customary regulatory approvals.
A month ago Ross announced he would team up with Lear Corp. and investment firm Franklin Mutual Advisers LLC to buy up businesses in the global automotive interiors industry.
Ross has made billions with a solid strategy: Buy low, sell high. Recently, he did it with steel. Now he sees value in auto interiors. He already has bought a chunk of Collins & Aikman's debt and could buy the rest of the troubled company out of bankruptcy court. And it won't hurt to have Lear on board for more deals.
Risk and red ink punctuate this business, particularly if it relies on General Motors and Ford Motor Co. But Ross has never been afraid of risk. The question is: Does he know something Wall Street doesn't?