In 36 years of working in the auto industry, Ken Way has seen plenty of turmoil: vehicle sales battered by recession and oil embargoes, the struggle to meet government-mandated safety regulations, the scrabbling for pennies of profit.
But Way is happy to say that the transfer of power at interior supplier Lear Corp. in Southfield is going exactly as he and his longtime Lear colleagues, Robert Rossiter and James Vanderberghe, have planned.
Way, 63, gave up his position as Lear's chairman Jan. 1, handing the title to Rossiter, 56, who also remains chief executive officer. Vanderberghe is vice chairman. Way will keep a seat on Lear's board, but said it's time for him to concentrate on skiing, golf and his grandchildren.
The Way, Rossiter and Vanderberghe trio has been one of the longest-running executive teams among big auto suppliers. It was a partnership formed in the crucible of difficult times at Lear Siegler Inc., which was tossed around among a series of corporate raiders during the mid-1980s. Each handoff saw another chunk of the company sold to pay down debt.
In 1988, as private investment firm Forstmann Little & Co. of New York was selling parts of Lear Siegler to finance its $2.1 billion acquisition of the company a year earlier, Way and Rossiter helped engineer a $500 million, management-led leveraged buyout of the auto parts unit, Lear Siegler Seating Corp., which then had sales of about $1 billion. The move vaulted Way into the chairman and CEO posts.
Lear has grown into the largest auto interior supplier globally, with sales of $13.6 billion in 2001. The company ranked No. 5 on the Automotive News list of top 100 global original equipment suppliers, one place ahead of its closest competitor, Johnson Controls Inc. of Glendale, Wis.
``I wish we could say we were visionary people, but all we tried to do was use common sense,'' Way said during an interview. ``When we got into this business, all we wanted to do was protect our jobs. We didn't have any grand ideas.''
Today's Lear is far different from the parts maker - then known as American Metal Products - that Way joined in 1966 as an industrial engineer. That was before Lear Siegler Inc. bought the company.
In the 1960s and 1970s, Lear Siegler built seat frame parts to automakers' specifications and shipped them to their customers' plants to be assembled into components before being installed in vehicles.
The start of the seating systems business at Lear was a fluke, Way recalled. It began in the early 1980s when Dodge wanted a seat bed for its full-size van. Lear stepped in when the automaker couldn't find another company to take on the project.
Then came a project to develop seats for the Indianapolis 500 pace-car version of the Chevrolet Camaro, which Lear turned around in less than eight weeks. Then Ford Motor Co. asked for help with a project for the Ford Mustang.
``The big guys, they had these cushion rooms, but they weren't very efficient,'' Way said. ``So when they started getting our product and saw the costs, they got excited. That really started to generate the interior system business, which then took off like a bandit because they were under cost pressure, quality pressure, and we could help them.''
Lear is one of five interior suppliers that vie for business with the world's automakers by offering to coordinate all the components that make up a vehicle program's interior. The company has been entrusted by General Motors to act as the interior integrator for its full-size truck platform and full-size car platform.
Integrator is an evolving role that intrigues, and frustrates, many suppliers.
Automakers expect cost savings and faster development times by letting an outside company handle large chunks of vehicle platforms, yet they are wary of giving up too much control. Suppliers crave the prestige of guiding high-volume projects but cringe at razor-thin profit margins.
Way believes that being an interior integrator will pay off for Lear and its customers as vehicle interiors have a better feel and quality.
But he does not believe in complaining publicly about how his customers are treating Lear. The past couple of years have been marked by severe angst among suppliers, with many squeezed by high debt on one side and automaker demands for steep price cuts on the other.
Lear felt that squeeze. The company took on plenty of debt to finance an acquisition binge that saw it buy 13 companies in the late 1990s, culminating with the $2.3 billion purchase of UT Automotive in 1999.
It hasn't made an acquisition since. Instead, Way said, Lear has focused on freeing up cash flow to make it easier to adjust to business changes. It also closed 21 plants.
``Some guys are in trouble, and they're going to be tougher on you than guys who are not in as much trouble,'' Way said. ``You just face the facts and work your way through it. The industry is what it is, and it's not going to change. Common sense prevails, and you work together and work it out. That has been our approach all along, rather than whining and crying about how these guys are treating us like crap. That doesn't work.''
Friction between automakers and suppliers is one of the constants of the business, Way said.
``You think Toyota lets you make a lot of money? I don't think so,'' he said. ``It's quieter and things are handled different. No customer in the world is easy to deal with. You've got to work at it all the time.''
In the short term, Lear has $3.6 billion of new business booked for the next four years, and Way sees growth potential for the company in China and other Asian markets.
Through the first three quarters of this year, Lear reported a loss of $105 million vs. a profit of $75.1 million in the year-ago period. Global sales totaled $10.7 billion in the period, up 4.3 percent from a year earlier.
Way sees another challenging year ahead, citing tough economic conditions, unsettled politics and the threat of war, and the pressure of contract negotiations between the Big Three and the United Auto Workers.
He said: ``When has this business been a cakewalk? I've never seen it that way.''