Players in the airbag business are carefully watching developments at Delphi Corp.
If Delphi is forced to sell its airbag business during its Chapter 11 reorganization, the competitor that ends up with it could move into a dominant position.
With sales of $442 million last year, Delphi was fourth in airbag sales for the three biggest global markets of Europe, North America and Japan-Korea, according to data from analysis firm CSM Worldwide Inc. Delphi also ranks fourth in North America with sales of $289 million. The numbers are estimates.
"Delphi is certainly a possibility for consolidation," CSM analyst Jim Gillette said in a November interview. "We're not sure where that Delphi business is going to end up. The door is still open for Delphi to do something. I am sure Delphi would like to retain airbag systems because electronics and safety is where they're making money."
Delphi filed for Chapter 11 reorganization in U.S. Bankruptcy Court in New York on Oct. 8. Typically, companies in Chapter 11 attract offers for various parts of their business from outside interests. Ultimately, the bankruptcy court, creditors and management decide what, if any, chunks of a reorganizing company get sold or closed.
"We've watched closely the situation at Delphi," said Tim Healy, executive vice president of TK Holdings Inc. in Auburn Hills, Mich., the American arm of Takata Corp. Healy made the remarks in an interview with Automotive News in late November. In general, Takata seeks to grow internally, Healy emphasized.
"Our No. 1 concern is how it's going to affect our suppliers," he said. "We have common suppliers who could get caught up in a bad situation. But we do look at it as a potential opportunity. We're not overactive at this time, but we're watching it very closely."
David Bodkin, Delphi's director of media relations, said: "We're looking at all of our product lines and all of our sites. No decisions have been made."
Delphi has a variety of business lines that could be attractive to other companies. Even before its Chapter 11 filing, Delphi placed up to nine plants in the United States on a fix, close or sell list.
According to industry estimates, 98 percent of Delphi's North American airbag business is tied to a single customer: former parent company General Motors.
You may e-mail Bradford Wernle at [email protected]