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:

Pin It

Comments

Recommended

Lamborghini has disclosed that it is looking into the possibility of releasing electric vehicles. With the Volkswagen Group revealing that it will be releasing electric vehicles within several years, there...
by - March 25, 2017
Daimler AG, through its Smart division, has disclosed that its two electric models, the Smart ForTwo and the Smart ForFour are now open for orders in Germany. Official market launch...
by - March 25, 2017
Lamborghini has officially offered clear proof that the Huracán Performante was able to set a new record at the Nürburgring Nordschleife with a time of 6:52.01 It was in early...
by - March 25, 2017
Top Gear has revealed that for its “Stars in a Reasonably Fast Car” segment, it will now be using a slightly enhanced Toyota GT86, which in the U.S. market is...
by - March 24, 2017
Porsche is laying aside any plans of pushing another hybrid hypercar into their line-up -- at least not at this time. Oliver Blume, Porsche Global Chief confirmed in a recent...
by - March 24, 2017
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