Cooper-Standard Automotive Inc. reported a net loss of $123.2 million for the third quarter due primarily to the production volatility of customers that the supplier is now asking to help absorb the hit.
The suburban Detroit rubber and plastic parts maker, whose customers include Ford Motor Co., General Motors Co. and Stellantis, saw profits tank on sliding sales of $526.7 million, down 23 percent from the same time last year, according to its Wednesday earnings report.
The company lowered its full-year sales guidance to $2.3 billion-$2.34 billion from previous guidance of $2.45 billion-$2.6 billion and said it expects an adjusted EBITDA loss of up to $25 million instead of the previously anticipated gain of $75 million-$105 million.
A dramatic decrease in auto production due to the global microchip shortage and soaring commodity costs have slammed the businesses. Cooper-Standard said it is renegotiating contracts with customers in hopes of recovering some financial losses.
"We're targeting recovery of more than $100 million overall," CEO Jeff Edwards said on a call this week with investors. "We've made good progress in our negotiations to date but have more work ahead to achieve the target."
Cooper-Standard is far from the only auto supplier hemorrhaging money amid the supply chain and microchip crisis. The semiconductor shortage is anticipated to cost the automotive industry $210 billion this year, according to experts.
Companies have aimed to mitigate financial damage by implementing a host of cost-saving strategies, but at Cooper-Standard none have been sufficient to keep pace with losses, executives said. During its earnings call, the company offered another example of how suppliers are seeking to be made whole and gave a peek into negotiations with customers typically kept under a tight lid.