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DETROIT — Even while Tier 1 automotive suppliers continue to snap up companies, leading suppliers and purchasing directors for several carmakers warned of the dangers of growing too quickly.

``By growing larger, Tier 1 companies add defined structure to their businesses with well-placed resources. But, too easily, it can also stifle our speed and agility to react to the changing needs of [original equipment manufacturers],'' said Robert Albert, chief operating officer of Becker Group Inc. of Sterling Heights, Mich.

Participants in a Jan. 13 panel discussion sounded a slightly cautionary tone at the 1997 Auto-motive News World Congress in Detroit. At issue were the merits and potential pitfalls of the frequent supplier base consolidations that have changed the industry. While suppliers outlined their plans to strengthen ties with carmakers during an era of acquisition, they said they are giving the OEMs what they want.

``It's not just merger mania, or whatever the media is calling it,'' said Kenneth Way, chairman and chief executive officer of Lear Corp., based in Southfield, Mich. ``We've had to respond to the need for cost reductions, globalization and productivity. These issues are real, and our acquisitions have helped to create more quality for OEMs.''

Way added that, by his count, suppliers spent more than $17 billion in 1996 in merger activity, and that one-third of his company's growth has been through acquisitions.

According to Plastics News' ranking of North American injection molders, Lear had injection molding sales of $610 million in 1996. Last year, Lear purchased Masland Corp., a maker of floor systems, and Borealis Industrier AB, an instrument panel manufacturer.

Other speakers at the seminar included John Spoelhof, president of Holland, Mich.-based Prince Automotive, an interiors supplier that was bought in July for $1.35 billion by Johnson Con-trols Inc. of Manchester, Mich.; Thomas Fabus, executive director of worldwide purchasing of car platforms for General Motors Corp. of Detroit; Jean-Baptiste Duzan, vice president of purchasing with Paris-based Renault; and Ralph Miller, president and chief executive officer of APX Inter-national, an engineering services firm in Auburn Hills, Mich.

Fabus helped spearhead the debate over whether bigger necessarily means better. He challenged merger-swelled suppliers to meet the same quality standards, deliver on time and optimize costs as well as they did when they were leaner.

``When do mergers add value?,'' Fabus asked rhetorically. ``In order to add value, they must bring some-thing that could not possibly be gotten by merely joining together two separate companies [on a project]. It has to take significant costs out of the assembled unit.''

Albert responded that cost savings could be gained through consolidation by providing complete systems to OEMs. In addition, he said his $450 million company remained competitive by keeping a local perspective in countries where carmakers are expanding.

``The way we work is to put a local person in the local market,'' Albert said.

That is especially needed with globalization, which both Fabus and Duzan touched upon. Fabus said GM expected in excess of 3 percent growth this year in the Far East and Europe. To compete worldwide means keeping vehicle costs as low as possible, he said.

Spoelhof said Prince needed JCI's resources to compete in the global marketplace. In 1994, Prince had sales of $50 million; in 1996, sales approached $900 million, he said. Today, the firm can provide a single source for interiors on a global basis, he said.

``We had to be more global,'' Spoelhof said. ``But with the business rapidly changing, we asked ourselves why fewer companies were doing more. The answer was that they were doing it better.''

Still, the panelists agreed there is room for smaller, Tier 2 firms to succeed, as long as they provide an innovative product at an economical price.