Airbag makers are scrambling to buy steering wheel companies so they can ship complete steering wheel systems to automakers. In the latest move, Breed Technologies Inc. last week announced it will purchase United Technologies Automotive's poly-urethane foam steering wheel division for an undisclosed sum.
The United Technologies operation was considered an attractive target. It has steering wheel plants in England, Mexico and Indiana, as well as a technical center in Detroit. Its customer list includes Ford, Chrysler, Nissan and Rover. To buy it, Breed had to outbid TRW Inc., the world's largest airbag manufacturer.
The move underscores Breed's determination to remake itself as a supplier of complete safety systems, including airbags, crash sensors, shoulder harnesses and bumpers. Formerly, Breed had established a reputation as a low-cost manufacturer that struggled to keep up with technological innovation.
Company founder Allen Breed's invention - a cheap, reliable electromechanical crash sensor - helped him compete against industry giants like TRW and Morton International. But rivals began marketing more-sophisticated electronic crash sensors, leaving Breed's future in doubt.
The company responded by purchasing companies that produced electronic sensors, steering wheels, safety harnesses and instrument panels. This year alone, Breed purchased five companies, including an Italian manufacturer of steering wheels, instrument panels, bumpers and plastic trim components, and a second Italian firm that manufactures upscale steering wheels.
Although last month's deal appears to be a key to Breed's future, it's not likely to affect United Technologies much. As part of its corporate shake-up, United Technologies' interiors division has decided to concentrate on four core products: headliners, door panels, instrument panels and mirrors.
The steering wheel division was profitable, but company executives knew its future was cloudy. To satisfy customers, United Technologies knew it would have to produce steering wheels with airbags.
The company was reluctant to enter such a risky - and costly -market segment.
``We have to be sensitive to our weak spots,'' said United Technologies' chairman, Norm Bodine, in a recent interview. ``We recognized that the old strategy was not sufficient.''
Meanwhile, TRW - once considered to be a front-runner in the bidding for United Technologies' steering wheel operation - will have to shop for another manufacturer. The Cleveland-based manufacturer already makes virtually all other airbag components and sensors.