DETROIT -- The recent multibillion-dollar takeovers of Meritor Inc. and Tenneco Inc. came about at the same time for different reasons, but both are likely to have a big impact in metro Detroit where the automotive suppliers have a major presence and long history.
Meritor's pending sale to Cummins Inc. is a $3.7 billion bet on the electrification of heavy-duty trucks and the role of the Troy-based company's e-axle in that theoretical future.
New York City-based Apollo Global Management Inc.'s purchase of Tenneco Inc., based in Lake Forest, Ill., with thousands of employees in Michigan, is the result of the struggling supplier's need for a capital infusion and the private equity firm's bid to cash in on a turnaround.
In both cases, some trimming and consolidation is the likely aftermath, followed by the chance for growth and investment depending on the priorities of new leadership and how successfully operations are integrated, according to company executives and industry experts.
Automotive companies in Michigan have become more accustomed to such shakeups in recent years as M&A activity remains red hot in an industry rocked by volatility and the race for electric dominance.
"I think it's good for the industry because it allows us to move much faster to get human capital and technology that doesn't exist today," said Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor. "There's pain that comes with it, too. There's growing pains and marriage pains that you have to go through."