2010 will be one of the best years ever for the U.S. auto parts suppliers

Article by Christian Andrei, on October 8, 2010

“A roller coaster ride” is how Mark Leder, co-founder of private equity turnaround firm Sun Capital Partners, describes the events that happened in 2010. About a year ago, there were doubts that the US auto parts suppliers would be able to get through a massive industry restructuring, but Leder thinks that 2010 is “turning out to be one of the best years ever for the industry.”

Leder, who was at the Reuters Restructuring Summit last Wednesday, said, "That business absolutely fell off a cliff in the fourth quarter of 08, was dead for a year, and 12 months after that, it has probably been among the best years for it.”

In the last few years, Chrysler Group LLC, General Motors Co. and their suppliers, such as Delphi Corp., Lear Corp., and Visteon Corp. have entered the bankruptcy process to sharply cut debt.

The auto sector has been boosted this year with a sharp rise in US auto sales. Leder pointed out that there aren’t many distressed auto parts companies currently.

The trend in AS auto sales has been on a gradual increase from 11 million in the first quarter to 11.3 million in the second quarter, on the annualized basis that analysts have been tracking. Delphi, which emerged from bankruptcy last year as a privately-held company, has started talking with investment banks about the potential of an initial public offering as early as next year, insiders told Reuters in July.

Visteon, a major supplier to Ford Motor Co., exited bankruptcy last week as an independent supplier. It had previously declined a potential tie-up with competitor Johnson Controls Inc. When Visteon filed for bankruptcy in May 2009, it had given warnings on the prospect for liquidation.

Leder, whose firm purchases troubled companies and works to turn them around, said that sales have gone up so quickly that no firm is actually struggling. He pointed out that the issue plaguing companies is getting the funding required for their working capital – a situation that creates opportunities for Sun Capital Partners. [via autonews - sub. required]

Topics: united states

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Nikola Motor’s hydrogen-powered semi-trailer truck is highly appealing with its many advancements but don’t expect it to arrive in the near future. In November 2016, Toyota announced the possibility of...
by - December 5, 2016
Usually, it is up to resourceful spy photographers to take clear pictures of vehicle prototypes, especially those that have aroused a lot of interest. The same is true for Project...
by - December 5, 2016
The much-anticipated debut of the new Wrangler will surely happen. As it approaches, we’ve gathered all the latest information released so far. Of course, most are expecting that the next...
by - December 5, 2016
Nissan has announced the pricing for its new commercial pickup line. So for those who have been waiting for Nissan’s official price list (plus a little more info), read on… ...
by - December 5, 2016
Sorry folks, the AMG-fied Mercedes-Benz X-Class will remain in the fantasy world. According to some news, the AMG big boss has finally spoken up about why an AMG X-Class is...
by - December 5, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries