By Alysha Webb, Automotive News China
Beijing - The head of purchasing for Lear Corp.'s seat division has moved to Shanghai from Michigan because Lear's customers want the supplier to source more parts from low-cost countries.
But there's more to the story. Most of Lear's new business is coming from Asia, and suppliers need to be close to their customers.
So the head of engineering for Lear's seat division also is moving to Shanghai, from Germany. "We feel we owe it to our Asian customers to build a strong infrastructure here to support the growth we have coming," said Lear ceo Robert Rossiter.
For example, Lear's global contracts with Nissan Motor Co. are worth nearly $1000 million. Nissan wants Lear to buy Chinese-made motors for the power seats. Rossiter and other senior Lear executives explained the company's strategy last week at the Beijing auto show.
Lear is not abandoning North America or western Europe, Rossiter emphasised. The company will continue to build seats there. Seat makers typically set up plants near automakers' assembly operations because seats are too bulky to ship long distances.
"From a finished-product standpoint, I think we will always support our customers in the local market," Rossiter said. "So if the product is built in the United States of America, then (our) plants will be built right there."
But parts for those seats - such as seat tracks, metal frames and recliners - will come from low-cost locations such as China, Mexico or eastern Europe.
A significant portion of the new orders are coming from Asia, especially China, says Lou Salvatore, Lear's president of global seat operations. In 2005, Lear did $200 million in seat business in China; next year, Lear's China seat sales will reach $1000 million.