Lear Corp. will have a 25 percent stake in a future International Automotive Components Group North America overseen by financier Wilbur Ross, if it can complete a deal to fold its interiors business into a joint venture.
Lear and Ross have been in talks to turn the interiors unit - which includes injection molding for instrument panels, door panels and other parts - over to IAC since October 2005.
In a Nov. 20 filing with the Securities and Exchange Commission, Lear confirmed that it now has a nonbinding agreement with Ross' W.L. Ross & Co. LLC and Franklin Mutual Advisers LLC to put its operations into a new North American branch of International Automotive Components LLC. Lear said it expects to have a final deal in place soon.
IAC already operates Lear's European operations through a deal completed Oct. 16. Lear holds a third of the equity in the company's European branch.
New York-based Ross & Co. and Franklin are the majority backers of IAC, which also has operations in South America and owns the former Collins & Aikman Corp. facilities in Europe.
Southfield, Mich.-based Lear has been anxious to decrease its exposure to interior plastics and instead focus on seating and electronics. North American automakers that once had talked about sourcing huge sections of car interiors to single suppliers now want to have more control over individual parts.
At the same time, the firm has battled rising resin costs and seen production by customers drop.
``The negative impact of the recent industry environment has been more pronounced in our interior business,'' Lear executives noted in the SEC filing.
Ross and Lear originally planned to buy much of C&A, which has been operating under Chapter 11 bankruptcy protection for more than a year. The plan was to buy most of C&A's global holdings and fold them into Lear's holdings to create IAC. Part of that concept remains in the air. Southfield-based C&A has announced plans to sell its holdings, but no one is certain when or how.
If the full venture is completed, it will mean a huge shift in control in a North American supply base that already has undergone extensive ownership renovations. Lear's North American interiors group alone was worth $2.2 billion in 2005.
Parts of other interior suppliers also are available, with Troy, Mich.-based Delphi Corp. seeking to sell some of its facilities and Automotive Components Holdings LLC - controlled by Ford Motor Co. of Dearborn, Mich. - seeking a buyer for interiors facilities once operated by Visteon Corp.