TRAVERSE CITY, Mich. -- International Automotive Components North America is using its plastics capabilities to give itself a little breathing room from both troubled suppliers and higher resin costs.
Its existing injection molding equipment allows it to bring some plastics production in house if it runs into problems, said President Jim Kamsickas. At the same time, the ability to create its own specific resin blends has helped give it one small way to fight rising material costs.
Neither option is the preferred action, but businesses conditions are not what anyone prefers either, he said at the Management Briefing Seminars here today.
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.
The suburban Detroit supplier – controlled by New York billionaire investor Wilbur Ross – emerged early last year from the combination of Lear Corp.s interior business with the former Collins & Aikman Corp. along with other acquisitions.
IACs product mix by vehicle type has moved from being about an even split between trucks and SUVs and cars to about 60-40 ratio of cars to trucks in the last 12 months.
Weve 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 the companys acquisition of a former Collins and Aikman plant in Hermosillo, Mexico, which supplies interior components to Ford cars, but Kamsickas attributes some of the companys shift to luck.
For the most part, youve got to get lucky, he said. We have a nice trend and a lot of the business awards we are getting now are focused on, and weve put our investment on, where we think the market is going.
But more small-car business and insulation from bringing production from troubled suppliers in-house hasnt made IAC immune to closing plants.
The company has closed seven plants in the last six months, and plans on closing more in the near future to help bring the companys plant footprint in line with market demands.
But at the same time the extent of its manufacturing capabilities has given it an advantage. It can make almost every part it uses, Kamsickas said, so if it encounters a troubled supplier, it can vertically integrate those parts into its own plants.
It provides us more protection than probably many other companies, he said. We dont go seek them in most cases, but were there to pick up the pieces before they become the pieces.
Our customers have a lot of confidence in us, they believe that were kind of the stable guy in town, he said. But we still have too much concrete capacity.
IAC ranks No. 31 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $5.30 billion in 2007.
Ryan Beene is a reporter for Crain's Detroit Business
Rhoda Miel is a reporter for Plastics News