North America's two largest wheel makers have put their suspension parts businesses on the sales block.
Superior Industries International Inc. of Van Nuys, Calif., announced its decision to seek buyers for its suspension components business in a Jan. 9 press release.
Also, two industry sources say Hayes Lemmerz International Inc. is seeking buyers for its cast-metal suspension parts business. The sources say Hayes has been sending a sales-offering circular to potential buyers.
Hayes would not confirm the move.
"It is company policy to not comment on rumors or speculation," spokeswoman Marika Diamond said in an e-mail Friday, Jan. 20, to Automotive News.
No one is making money in the suspension-parts sector because of the large capital investment required, industry executives say.
Both Superior and Hayes are focusing on their wheel businesses as the cast-metal sector suffers from high steel costs and cut-throat pricing.
Prospects for a quick sale of those businesses are slim. Two obvious buyers -- Intermet Corp. and Citation Corp. -- emerged from Chapter 11 bankruptcy last year.
The sale by Superior, according to a statement by CEO Steven Borick, stems from "intense competition in the global automotive industry (that) makes it imperative that Superior focuses all of its resources on its expanding aluminum-wheel business."
Hayes' restructuring has continued even after emerging from Chapter 11 bankruptcy in 2004. Early last month, it sold its money-losing components plant in Cadillac, Mich. Almost simultaneously it announced construction of a component plant in the Czech Republic.
The United States has been a challenge for the Northville Township, Mich., company. Hayes' component business suffered a loss of $43.3 million on total parts sales of $533.3 million for the nine months ended Oct. 31, 2005, according to Hayes' third-quarter report.
Its steel- and aluminum-wheel business for the same period posted a $45.6 million gain on total wheel sales of $1.22 billion. The company's total sales for the period were
$1.75 billion, the report said.
Hayes invested heavily in its component business, including the $605 million acquisition of CMI International Inc. in 1999. Part of the CMI business included suspension components. The deal was part of a strategy to supply automotive corners -- modules of wheels, brakes and suspension parts -- but automakers didn't pursue the concept.
You may e-mail Robert Sherefkin at [email protected]