Conflict between TRW and GM may end $700mil brake parts contract

Article by Anita Panait, on November 1, 2013

An ongoing row between and General Motors Co. and TRW Automotive Inc. may result to the termination of a $700-million brake component contract in Saginaw, Michigan, sources told Crain's Detroit Business, an affiliate of Automotive News. In September, TRW said in a filing with the U.S. Securities and Exchange Commission that it ended a brake component contract -- representing $700 million in revenue and 6.5 percent margins in 2012 -- with an undisclosed customer.

Although TRW declined to discuss the contract or identify the location of site involved, sources privy with the contract told Crain's Detroit Business that the supply deal is between TRW and GM. They added that the deal involves brake assemblies supplied from TRW's East Genesee Road site in Saginaw. Crain's TRW chief executive John Plant told investors in a conference call that pricing may have been issue in the terminated contract.

Plant said that TRW's customers have a view about the price point they feel they want to pay for certain components. He said that such pricing sometimes coincides and sometimes does not with TRW's price point. Plant quipped that they have to assess where their competitive situation is or where their position assets are at.

He then said that in the case of the terminated contract, TRW's production base compared to the customer's price mix expectations could differ to some degree. It is still uncertain if GM has already found suppliers for the brake components.

The contract termination led to a 90-day consultation period, but Plant quipped that the deal likely would end in January 2014, adding that TRW could partially source the components for an undisclosed period of time. He remarked that while talks are ongoing, it seems that TRW will not retain the business, referring to the contract.

Topics: trw, gm

If you liked the article, share on:


Login or Create new account to add a comment!


Mitsubishi is now officially part of the Renault-Nissan alliance after Nissan took over the Japanese car company recently. We know a lot has been happening in the car industry, but...
by - October 24, 2016
Driving the newest 2017 BMW 5-Series (G30), Clive Owen (Closer, Children of Men) returns to his role as “The Driver”. In this latest installment, what initially starts as a simple...
by - October 24, 2016
Many had wished that a Lamborghini Huracán Superleggera would somehow make a surprise debut at the recently held Paris Motor Show. Sadly, not a single Lamborghini appeared anywhere in sight....
by - October 24, 2016
Aston Martin and Red Bull Racing teamed up for the first time in creating what looks like one of the most ferocious beasts in history. The British car manufacturer has...
by - October 24, 2016
German premium carmaker Audi is reportedly planning to buy back around 25,000 Audi Q7 SUVs powered by its 3.0-liter V6 TDI engine in the United States. The buyback should compensate...
by - October 24, 2016