International Automotive Components North America is using its plastics capabilities to gain a little breathing room from troubled suppliers and higher resin costs.
The firm's injection molding equipment allows it to bring some production in-house if it runs into problems, said President Jim Kamsickas. At the same time, its ability to do some compounding helps give it a small way to fight rising material costs.
The situation is not one that IAC prefers, but the current business conditions are not what it prefers either, Kamsickas said.
``It may not have been core before, but you know what, times have changed and if we need to make it core, then we are making it core,'' Kamsickas said in an interview at the Management Briefing Seminars in Traverse City.
Dearborn, Mich.-based IAC's supply breakdown by vehicle type has shifted in the past 12 months from being split almost evenly between cars and trucks or sport utility vehicles, to roughly a 60-40 mix of cars to trucks.
``We've dramatically moved from trucks and SUVs over to cars just through the recent programs' build-offs and recent programs' built-in,'' Kamsickas told reporters.
Part of that shift was spurred by IAC's acquisition of a former Collins & Aikman Corp. plant in Hermosillo, Mexico, that supplies interior components to Ford cars. But Kamsickas also attributes some of that shift to luck.
``For the most part, you've got to get lucky,'' Kamsickas said. ``We have a nice trend and a lot of the business awards we are getting now are focused on and we've put our investment on where we think the market is going.''
But more small-car business has not made IAC immune to industry turmoil.
As IAC has consolidated its holdings, it has closed seven plants in the past six months and expects to close more in the near future, to help bring the company's plant footprint in line with market demands.
``Our customers have a lot of confidence in us. They believe that we're kind of the stable guy in town,'' Kamsickas said.
``But we still have too much concrete capacity.''
At the same time, the extent of its manufacturing capabilities has given it an advantage. IAC can manufacture almost every part it uses, Kamsickas said, so if it encounters a troubled supplier, it can integrate those parts vertically into its own plants.
``It provides us more protection than probably many other companies,'' he said. ``We don't go seek them in most cases, but we're there to pick up the pieces before they become the pieces.''
To give it a slight edge on resin prices, IAC is using parts of a compounding line once owned by the former C&A to blend plastic with color and other additives like talc, creating its own plastics recipes at a lower cost.
IAC will move the equipment from a former C&A plant in Belleville, Ontario, to a U.S. plant that has not been disclosed.
``We are the ham in the sandwich and we're getting pushed from the bottom from the supply base, and there's no room to move at the top. What else can you do?'' Kamsickas said.
``What else you can do is say, `OK, let's do the separation on the resin. What goes into resin and what can we do with our own compounding and our own manufacturing? We're not going to go back to the reactor, but there's no reason why today we don't go somewhere in between where we are now and the reactor,' '' he said.
Expertise in manufacturing and materials gives IAC another edge with customers, Kamsickas said. In working with Nissan Motor Co. Ltd., the company was able to create an injection molded bracket for doors on the Altima sedan that will meet federal standards for side-impact crashes, but also save 5 pounds per door in weight, he said.
Ryan Beene is a staff reporter for Crain's Detroit Business, a Plastics News sister publication.