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Supplier Downsizing May Boost European Design

Materials consultant Robert Eller expects European suppliers to acquire unprofitable U.S. plants and, thereby, influence interior design.

DETROIT – As U.S. automotive suppliers endure massive restructuring, driven in some cases by bankruptcy, one consultant foresees an unexpected consequence that could change the face of automotive interiors in North America’s largest vehicle market.

Key players Lear Corp., Delphi Corp. and Collins & Aikman Corp. all have plans to unload unprofitable North American plants, some of which materials consultant Robert Eller expects European suppliers to acquire – and, in the process, to inject European design influence into U.S. vehicle programs.

Unlike the others, Lear is not in bankruptcy, but it has said it plans to consolidate or close about a dozen plants in North America.

Likewise, Delphi has 44 manufacturing plants in the U.S. and says it intends to keep only eight. The No.1 U.S. supplier has identified cockpits, instrument panels and door modules as no longer core to its future product portfolio.

Suppliers everywhere in the world want a piece of the U.S. market, but it is the Europeans that currently are “flush with cash” and most likely to purchase available assets domestically in the near term, says Eller, president of Robert Eller Associates Inc., a consultant to the plastics and rubber industries.

“The supply chain will consolidate and flatten and will further globalize and impose further cost pressures for those in the chain,” Eller says in a panel discussion here at the Ward’s Auto Interiors Show. “With the sell-off of plants, you will see more European influences in interiors.

European vehicles are world renowned for stylish, well-crafted interiors, even in moderately priced vehicles. In recent years, U.S. auto makers, particularly General Motors Corp., have attempted to emulate the Europeans with higher quality materials and by striving for harmonious design cues within the cabin.

U.S. suppliers are not in a financial position to acquire available facilities in the domestic market, Eller says, which opens the door to others worldwide. He says Chinese companies also are interested in U.S. facilities, as are Japanese companies to a lesser extent.

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