General Motors Corp. has dropped Visteon Corp. from its short list of suppliers picked to integrate vehicle interiors. The decision is a blow to Visteon's effort to expand sales beyond Ford Motor Co., its former parent company.
GM and Visteon have confirmed that the Dearborn, Mich.-based supplier is no longer one of the handful of companies pre-selected as integrators. Until last month, Visteon had been slated to oversee GM's next generation of small-car interiors.
``We've made the decision to work with fewer of them at this time,'' said Bo Andersson, GM vice president-worldwide purchasing, production control and logistics.
Visteon spokesman Greg Gardner noted that while the supplier no longer is managing a future interior program, it still is a ``key supplier'' to the Detroit-based automaker.
It was a ``difficult decision,'' said GM spokeswoman Renee Rashid-Merem. In the end the firm decided to stick with companies with a more established history in independent interior modules and with GM.
``The decision will help to streamline communications between GM, the involved integrators and other suppliers while allowing us to more effectively manage resources for the design and engineering of current and future interiors,'' said Jim Queen, GM vice president, North America engineering.
In January GM had introduced five suppliers handpicked to serve as interior integrators on future programs. Visteon would take on the next generation of small cars. The three biggest global players in interiors also won contracts, with Lear Corp. set to manage full-size cars and trucks, Magna International Inc.'s Intier Automotive Inc. charged with overseeing full-size sport utility vehicles and Johnson Controls Inc. assigned minivans and midsize cars.
Venture Industries Inc. won the final slot, working on the next generation of the Hummer H2.
Visteon's departure from the role caught industry followers by surprise, since it has pushed for wider customer recognition. The company has a goal to win $1 billion in new business this year outside of Ford.
``We have a lot on our plate for 2002,'' President Mike Johnston said during an April 18 conference call with analysts. ``Probably No. 1 is continued progress on expanding our customer and geographic base.''
The GM work could have provided solid footing for that expansion.
Interior integrators will not make every part of the interior, but will have responsibility for the program, including managing all other suppliers. GM retains final sourcing decisions.
Visteon has little interior content on GM's small-car platform. Even if forced to coordinate components made by other firms, the management contract would have given the company a foot in the door, said Paul Haelterman, an industry analyst with CSM Worldwide of Northville, Mich.
Visteon still has multiple contracts for future GM products.
``We continue to win General Motors business,'' said spokeswoman Robin Pannecouk. ``We continue to be a strong supplier.''
Insiders watching GM's shift to integrators said there were disagreements between the former Ford parts unit and the automaker when it came to who would make the actual parts. The difference of opinion left questions about whether Visteon would retain enough manufacturing content to turn a profit.
According to a Wall Street analyst who spoke on the condition of anonymity, in early discussions interiors integrators were told they would have total control of their projects. But by the time GM made its announcement on the selection early this year, it took a more cautious approach to ease the system into place.
``GM is essentially saying ... if you want to be a true integrator with design and sourcing control, first prove that you can manage the process,'' he said.
Sherefkin is a staff reporter for Automotive News, a sister publication to Plastics News. Automotive News projects editor David Sedgwick also contributed to this story.