DelGrosso has experience fixing sinking auto suppliers. He joined Chassix in 2016 to help the supplier emerge from bankruptcy and has since led a turnaround.
Chassix was born leveraged in April 2013, when Tom Gores-owned Platinum Equity formed it by merging Wixom-based Diversified Machine Inc. and SMW Automotive Inc. of Troy. Platinum had acquired Diversified Machine from The Carlyle Group in December 2011.
The debt proved insurmountable, and Chassix filed for Chapter 11 bankruptcy in March 2015 with $556.7 million in total debt and $34.3 million in assets after missing bond payments, but reorganized and emerged in July of that year.
Since emerging, DelGrosso led a $50 million expansion in Europe and a roughly $30 million acquisition of Austrian conglomerate Benteler International AG's automotive casting business.
"He brings the right vision, leadership experience and operational expertise needed to drive Adient's transformation forward," John Barth, then interim chairman of the Adient board, said in a news release.
Since his arrival, DelGrosso has terminated several executives, including Byron Foster, executive vice president overseeing the seats and mechanisms business, and Brian Grady, vice president of the commercial business, and realigned the businesses to operate on a regional basis.
"There are some similarities between Adient and Chassix," DelGrosso said. "Both are the result of poor execution and an aggressive growth strategy. We had a few tough launches, but only a minority of plants in the U.S. and Europe were troubled. I saw this as an opportunity to reflect on how we were operating the businesses. I decided to push accountability and responsibility back to the regions. Leaders in those regions now have the autonomy to operate efficiently."
DelGrosso said the company was too centrally focused and bloated with centralized upper management. The differences in operations regionally were distinct enough that the centralized control led to the problems.
He calls his plan, and Adient's new internal mantra, "Back to Basics."
While competitors Lear and Magna International have managed strong growth by investing away from seating, DelGrosso maintains the company will stay the course.
Colin Giles, a research analyst focused on supply chain and technology for Southfield, Mich.-based IHS Markit, said managing the core portfolio may play well for Adient.
"Investing in the right products and technologies is crucial, particularly as the technological adoption and development trend in the auto industry is accelerating rapidly," Giles said. "While it is important to keep an eye on the future, companies must not lose focus on the present. Smart asset management and continuous improvement now produces the capital necessary for investing in the future."
For Adient, that means rightsizing the company's seat structures and mechanisms division. The goal is to pair down that division's $3 billion in revenue by $400 million by letting bad contracts run their course and ending supply to competitors.
"We're reducing revenue on selling across the broader range," DelGrosso said. "We were selling not only to customers but to competitors and it created challenges and diminished our returns on that scale. We're allowing for an organic roll-off, letting contracts expire."
Much of what DelGrosso is implementing is just that, allowing operations to expire. He indicated much of the company's problems can be attributed to lusting after acquisitions and diversification.
"A lot of that activity moved us away from the formula of Adient," DelGrosso said. "[Former executives] wanted to expand to adjacent products, like the Boeing JV and Futuris and Recaro. That diluted a lot of resources, took us away from our core business. Diluted ourselves to a point where we weren't executing on launches and were not commercially focused."
On Oct. 18, Adient reduced its stake in the JV with Boeing from 50.01 percent to just 19.9 percent.
Adient also secured a deal to refinance its debt in May to the tune of $750 million, pushing its debt maturing out until 2024.
Wall Street has responded to DelGrosso and his moves. Shares are up 23.4 percent year-to-date to $20.20 in afternoon trading on Nov. 21.
"With what we see as the right team in place to fix Adient's woes, more time to reduce debt, and option value from nonautomotive markets, such as business-class airplane seats and perhaps higher-dollar automotive seating content from autonomous vehicles, we think Adient is a compelling opportunity for investors willing to ride out the volatility of a turnaround story," David Whiston, autos stock analyst for Chicago-based Morningstar Inc., said in an Oct. 14 analyst note. "The stock isn't for everyone, though, because the turnaround is likely to take a long time. However, we don't think the transformation has to be completed for investors to make real money."
With the improvement plan executed, DelGrosso is shifting Adient to its next goal: catching its competitors.
Lear and Magna International enjoy margins higher than 11 percent compared to Adient's at just over 5 percent.
"In a stable environment, that's not theoretical; that's a reasonable target," DelGrosso said. "This is a really good company. We're rebuilding its credibility. We're executing things as fast as we can without creating more problems. We're a very capable company, and I think that's becoming apparent."