Adient got an unpleasant surprise last month on the road to remaking itself into a seat supplier for autonomous and electrified vehicles of the future: Old-fashioned cost problems zapped its quarterly earnings.
Launch problems, difficulties obtaining certain specs of metal, higher steel prices and the loss of some customers for its seat structures and mechanisms business caused headwinds that blew the company back. The company reported a net loss of $216 million attributable to Adient operations, on revenue of $4.2 billion for the quarter ending Dec. 31.
But CEO Bruce McDonald is assuring the industry that Adient — now just more than a year into independence from Johnson Controls — is still making progress.
"Unfortunately, and rightly so, the challenges impacting our seat structures and mechanisms is casting a shadow over our whole business," McDonald said last month in a conference call with investors. "Obviously, we need to continue to make the investments that we've talked about to get the business back on growth trajectory."
Despite making big strides forward last year, the quarter left Adient hemorrhaging cash from core operations.
Adient was banking on cash from the seat structures unit to fuelthe company's future plans, and it is now scrambling to get back on track.
But the difficulties ahead will not derail Adient's long-range efforts to become market leader in the new world of electric and self-driving vehicles, McDonald said. The company is working on new fabrics, lightweighting, safety and integrated technology in seats, and developing autonomous-drive interiors that might not be commercialized for another decade.