Adient is the world's largest automotive seat maker, but it is struggling to make money despite still-strong North American car sales. The company lost $1.5 billion in 2016, recovered with a net income of $877 million last year, then plunged again. CEO Bruce McDonald stepped down on June 11 after Adient announced a quarterly loss of $168 million.
Henderson, a former CEO of General Motors with a reputation for cost control, wasted little time identifying Adient's missteps. One week after McDonald departed, Adient scrapped a $100 million plan to move its corporate headquarters from Plymouth, Mich., to Detroit.
Company executives also have questioned Adient's $360 million purchase of seat maker Futuris Group in 2017. Futuris was founded in Australia in 1967, and it produces seats and other components for several Chinese automakers.
It also supplied Tesla, Ford and GM in North America, and Adient was counting on it to target new-age West Coast EV startups. That turned out to be a bad bet after Tesla decided to make its seats internally.
"We've been a little distracted," said Adient's chief technology officer, Detlef Juerss, during a July 30 industry presentation in Traverse City, Mich. "We're now transitioning to a focus on the day-to-day business ... not just the finer things in life."
Those day-to-day problems include high scrappage rates, rising steel costs and glitchy product launches. Adient's seat structures and mechanisms division has suffered chronic losses.
"There has been a ton of distress in the segment," Wybo said. "The suppliers have been beating each other up on price. It's just one of those product lines with too much competition."
Adient has some strengths. The company is profitable in China, and its 33 percent share of the global seat industry gives it access to virtually every major automaker.
But Adient has struggled to regain momentum since it was spun off from Johnson Controls Inc. in 2016. And as auto sales in the U.S. and China are starting to stagnate, Adient's turnaround may prove difficult.