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

Article by Christian A., 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

Recommended

After the highly dynamic Polestar 1 two-door coupe – Polestar’s first ever production car -- was recently unveiled, not a few people’s curiosity was piqued as to how much they...
by - October 21, 2017
The BMW 7 Series is already highly sought after but nonetheless, the German marque is giving it a more exclusive variant for the Russian market, and they are calling it...
by - October 20, 2017
Several automakers including Porsche, Volkswagen, Smart and even Land Rover have all been victimized by cheap Chinese copycats. And if you haven’t seen it yet, the most recent one would...
by - October 20, 2017
The Mercedes-Benz G-Class has been around for quite some time now but to bid it farewell, the company has launched the Mercedes-AMG G65 Final Edition. Mercedes will only build a...
by - October 20, 2017
Have you ever wondered what you can you buy with $9,365 in your pocket? Well, you have quite a lot of options. In fact, you can even purchase a used...
by - October 20, 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