There's a scene in the movie As Good as It Gets where Jack Nicholson's character directs his misplaced anger toward a group of emotionally disturbed patients.
What if the present is as good as life gets? he asks. The patients seem terrified by the thought.
Transfer that same idea to today's large suppliers in the automotive industry. After years of toil, their sound business empires turn to castles of sand. For many, today is as good as life will get.
And, as good as it is, it is not going to be enough to compete.
Witness the latest round of the eat-or-be-eaten merry-go-round in the auto industry:
Excel Industries Inc., a 70-year-old firm with $1.1 billion in sales, sold to Dura Automotive Systems.
Aeroquip-Vickers Corp., with sales of more than $2 billion, about to be sold to Eaton Corp.
LucasVarity plc, a $2 billion company, going to TRW Inc.
And United Technologies Automotive, with sales of more than $3 billion, almost gone, hungry bidders waiting to feast at its table.
Suppliers have moved to the breaking point. No longer is a simple, multibillion-dollar firm considered big enough to make the cut; you now have to be in the multimultibillion-dollar range.
And it is no longer good enough to have followed the automakers' lead. Carmakers have told suppliers to globalize and suppliers have responded. Carmakers also have told suppliers to keep costs down, and suppliers have responded.
Take the case of Lear Corp., a supplier titan with an amazing story of growth and transformation. Now, the company is struggling, gutting 2,800 jobs and closing 18 plants. The slash-and-burn strategy mainly comes courtesy of deep-set cost problems in Europe. Other suppliers, such as Donnelly Corp., also have found Europe to be a frightening stage.
Meanwhile, since November, rumors have floated that Ford Motor Co. wants to buy Lear and merge it with its Visteon Automotive Systems parts-making unit. True or not, it says something about the pack of flies buzzing around suppliers these days.
Who's to blame for the current mess? Some point to Wall Street. Some say suppliers themselves; after all, they are the ones who wanted more responsibility.
Meanwhile, suppliers talk of gaining critical mass, a buzzword that means size is everything. A line is drawn between those who have mass and those who don't.
Auto sales continue at a healthy pace, but supplier earnings are sinking. Employees who thought they had good, long-term jobs with healthy companies are packing their boxes and polishing their resumes. What happens to an industry where as good as it gets is not good enough? Maybe we need Jack Nicholson to keep things in line.
Pryweller is Plastics News' Detroit-based staff reporter.
