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April 16, 2018 02:00 AM

Lear gets smart for its growth

Lindsay Chappell
Automotive News
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    Detroit — Lear Corp., known for decades as one of Detroit's leading automotive seat suppliers, is rapidly evolving into the maker of a different product: smart seats.

    With a growing business in electronics, Lear is pushing deeper into advanced electronics to amass the necessary technologies to jolt its seats into a new era of sophisticated vehicles, said Ray Scott, the career employee who became CEO on March 1.

    "I absolutely believe the seat is going to be a smart device," Scott told Automotive News at Lear's suburban Detroit headquarters. "Seats haven't really changed."

    But now, he added, Lear wants to turn its bread-and-butter products into connected components. In five years, Lear expects to be known not as "a seat maker," but as "a leading technology innovation company."

    The seats will operate as individual spaces that adjust as passengers shift and turn. The connected electronics in their headrests will let occupants listen to their own music or carry on their own phone conversations without disturbing others, a feature that will be especially useful in the era of shared vehicles. The seats will let each passenger adjust individual climate and even communicate biomedical data when needed.

    In Lear's vision, smart seats will be free of bulky wire harnesses, riding instead on electric rails that provide greater degrees of positioning and control. By connecting the seat's power to the vehicle's safety systems, the seat can automatically move to a safer position when sensors indicate an impending crash.

    Looking out the window of Lear's executive offices at the corporate campus, Scott, 52, said the company has grown from about $800 million when he joined in 1988 to $20.5 billion in consolidated sales last year.

    To keep growing, Lear is undertaking what he calls "a convergence." That means infusing its long-standing expertise in auto seats with its growing electronics technologies. "These were two stand-alone product groups that work great independently," he said. "Now there's this convergence that we're seeing. In a world of autonomous vehicles, where you can move seats and rotate them in the vehicle, that's essential."

    In late 2015, Lear bought Arada Systems, a Michigan producer of vehicle-to-vehicle communications systems. Last December, Lear acquired EXO Technologies, an Israeli developer of GPS technology. The move will give Lear the ability to have highly accurate vision of road and traffic activity in the coming era of autonomous driving.

    Also last year, Lear spent $307 million to buy the automotive seating unit of supplier Grupo Antolin, which is focusing instead on other interior parts. That acquisition gave Lear a list of new European and North African seating customers. But perhaps more important, it gave Lear a technology that Antolin had just developed: an electric rail approach to seat power, replacing wire harnesses and giving seats more flexibility in their position.

    The technology will play a key role in future Lear seats, Scott said. He said Lear has the approach in development for two customers that will launch in about two years. He would not identify the customers.

    "We're designing electric rails within the floor of vehicles. The seats move on a powered rail — so no wiring hanging down," he said.

    He expects to begin launching even more sophisticated seats in 2022 or 2023.

    Lear's convergence strategy is winning customer acceptance, Scott said. Speaking to analysts in January, before he succeeded then-CEO Matt Simoncini, Scott said Lear expects $500 million to $700 million of new business this year for its electrical distribution operation, which falls under the name E-Systems. That business has virtually nothing to do with seating, the business that made Lear a global giant.

    "The amount of quotes that we have in the pipeline has tripled in the last six to eight months in these areas of connectivity, convergence and electrification," he said.

    The efforts have given Lear $4 billion in new orders on its books — the largest amount in the company's history, according to Scott.

    Many suppliers are offering new technologies in vehicle electronics, he acknowledged. "But now," he said, "we're going to control that through the seat."

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