Lear Corp.'s global restructuring plans will see it decrease its emphasis on its interior components group in favor of its seating and electronics integration business units.
The Southfield, Mich.-based auto supplier had announced in June that it was launching a program that could see it close as many as 20 facilities. Those plans still are under consideration, but during a July 29 conference call with analysts, top executives noted that Lear's plastics-heavy interiors business is the biggest focus of that restructuring.
The interiors unit is on a pace to break even this year, but when it considers the high cost of capital equipment and a decision by General Motors Corp. reversing earlier plans to outsource full interior programs to suppliers, it simply does not make sense for long-term investments, executives said.
``At this point, the direction has changed somewhat,'' said Lear Chairman and Chief Executive Officer Bob Rossiter. ``The approach today in purchasing is that they would rather buy components than complete interior systems.''
With the auto interiors business as a whole going through a consolidation, it makes sense to question Lear's long-term approach, he said. It is working with outside consultants to determine what it should do. Options include divesting some operations.
``That doesn't say we're leaving the plastics business,'' Rossiter said. ``It says we're trying to find a way that gives us a chance to be successful.''