Size counts, at least when it comes to battling rising resin costs, according to David Stockman, president, chief executive officer and chairman of North America's biggest injection molder, Collins & Aikman Corp.
The Troy, Mich.-based auto supplier has dealt with restructuring costs and competitive sales during the past two years and now anticipates turning a profit in 2004.
C&A buys about 500 million pounds of resin annually, a fact that should play into the company's favor, Stockman told stock analysts in a March 11 conference call.
``There are large numbers of world-scale suppliers of most of these resins,'' Stockman said. ``We have found that our ability to play one supplier against the other or to shift volumes from one supplier to the other ... allows us to minimize both the timing and the extent of any possible resin price increases.''
C&A executives have maintained for two years that the sheer breadth of its purchasing would allow the company better leverage. That plan is holding strong now, said Stockman, who added that he expects any pricing surges now will not last long.
``We've had a lot of requests for pricing increases,'' he said. ``We've politely said no.
``We've told [suppliers] that we're in the process of finding savings for our own customers as a Tier 1, and you are in the same boat with us. Price increases are not acceptable or discussible at this time.''
Collins & Aikman posted sales of $3.98 billion in 2003, up about $100 million from 2002. It had a net loss of $57.5 million, including restructuring costs of $49.9 million. The company reduced its white-collar workforce by 800 jobs during 2003.
The company also noted that its audit committee has completed an inquiry into questions about business deals between the firm and two board members, Charles Becker and Elkin McCallum.
Becker also sold his injection molding business, Becker Plastics LLC to C&A in 2001 while McCallum was involved with another 2001 purchase, textile maker Joan Automotive Fabrics.
The auditors reported the overall deals were clear, but chided the operations for failing to disclose fully some amendments to business dealings. The group determined there was no need to restate previous financial results.