TROY, MICH. (Aug. 16, 10:25 a.m. ET) —- Inteva Products LLC, the interiors supplier spun off by Delphi Automotive in 2008, is preparing to cut its network of 1,000 suppliers by nearly half.
The company wants to streamline its supplier network in the wake of its merger with ArvinMeritor Inc.'s interiors operation. Mary Foster, Inteva's purchasing chief, says the task will take three to five years.
About 100 suppliers account for 80 percent of Inteva's annual purchasing budget, Foster said. Those suppliers will form the core of the company's supply base. The remaining 900 suppliers will be reduced by 50 percent, she said.
Inteva can make fairly quick sourcing decisions for generic components such as door-latch parts. But for components related to safety, such as instrument-panel cross pieces that must be crash-tested, Inteva will wait until the next product cycle.
Foster is scrutinizing Inteva's purchasing operation as the company tries to integrate the business unit it acquired last year from Troy-based ArvinMeritor. Inteva seeks to complete that integration by Oct. 31.
Given the product cycles that most automakers have adopted, it will take longer than that for Inteva to reorganize its purchasing operation. And automakers often specify which Tier 2 supplier should produce key components such as steering columns, air conditioners or crossbeams for the instrument panel.
“We will be wildly successful if we can pull this off in three to five years,” Foster said.
Inteva, which is based in Troy, Mich., is a wholly owned subsidiary of Renco Group Inc. Inteva makes instrument panels, consoles, cockpits and door closures.
New York-based Renco Group acquired Inteva from Delphi Automotive two years ago for $27.3 million. With the addition of ArvinMeritor's body systems division in January, Inteva also produces sunroofs, motors and electronics. It employs 8,000 in 18 countries.