By Robert Sherefkin, Automotive News
Detroit, Michigan - After a stormy decade of spinoffs, megamergers, acquisitions, grand expansions and occasional red-faced retreats, the pecking order for North America's auto suppliers has a distinctly new look: Americans no longer are running the show.
For the first time, a company based outside the US is the largest supplier of parts to automakers and other suppliers' North American factories. Canadian parts giant Magna International Inc. has elbowed its way past perennial No. 1 Delphi Corp. as the largest supplier to North America, based on 2007 sales.
And four other foreign-based suppliers have displaced US-based rivals, giving foreign companies half of the top 10 spots.
In 2006, foreign-based suppliers took just three of the top 10 spots. In 1997, only two foreign-based companies made the top 10.
An analysis of Automotive News' annual list of the top 150 North American original-equipment suppliers shows that the leading foreign-based suppliers are growing quickly through acquisitions, the same way US companies grew during the 1990s.
Continental AG's purchase last year of Siemens VDO catapulted the German supplier to No. 7, from No. 18 in 2006. Now, William Kozyra, Continental's North American CEO, must make the acquisition work. But if the experience of American suppliers is any guide, it won't be easy.
A decade ago, US suppliers held eight of the top 10 slots. But failed deals and financial engineering cost them position. And the Detroit 3's plunging production volumes slammed US-based suppliers that rely heavily on those customers.
Another factor: Many US-based suppliers lost North American sales as they followed automaker customers on overseas expansions.
Delphi, for instance, is in Chapter 11 reorganisation in the US, but not overseas. So it has sold off North American operations, while making markets such as China the centerpiece of its global growth strategy.
Automotive News bases its annual ranking on sales of original-equipment parts to automakers and other suppliers in North America.
The bulk of the data come directly from the companies, but in some cases the sales numbers are estimated.
Some of the companies that suffered the greatest sales drops last year can't blame falling Detroit 3 sales. For some, the cause was a retreat from grandiose growth plans.
Take Lear Corp. It slipped a notch to the No. 4 position after its sales declined 26.6 percent to $7190 million. Last year Lear dumped its money-losing North American interior trim businesses.
ArvinMeritor Inc.'s sales fell 34.6 percent. That dropped the sunroof and chassis supplier from No. 10 to No. 15. Last week the company said it will spin off its light-vehicle operations into a new company, eight years after the merger of Arvin Industries Inc. and Meritor Inc.
Or consider the Detroit 3's former parts-making arms. After being spun off from General Motors, Delphi held the No. 1 spot in both North America and the world for more than a decade. But in 2006 Robert Bosch GmbH passed it in global sales. And in 2007 it fell to No. 2 in sales to customers in North America.
Asset sales, driven by the Chapter 11 filing of its North American operations, contributed to a 14.8 percent drop in its North American revenues.
Former Ford Motor Co. division Visteon Corp. long ranked No. 2. Last year it slipped to No. 12.
In dollar terms, the three largest sales gains this year were by foreign suppliers: Continental AG, Robert Bosch llc, and Denso International America Inc.
Denso's rise in North America may be the most remarkable. Its growth was generated internally. The one-time spinoff from Toyota Motor Corp. benefited from the Japanese auto giant's rising North American volumes.
While Magna overtook Delphi, its sales rose just 5.4 percent to $13.59 billion. Magna is focused on the Russian automotive market. Its recent purchases include Steyr Daimler Puch, Donnelly, CTS Fahrzeug-Dachsysteme GmbH and New Venture Gear Inc.
Since 2006, Robert Bosch parent Robert Bosch GmbH acquired or announced the buyout of a half dozen companies, most of them in Europe.
Acquisitions often involve two steps forward and one back. Take Continental. After boosting sales with the Siemens VDO acquisition, it now is trimming because of overlap. Kozyra says his North American operations could shed "a few hundred" jobs.
"We're slimming down where we have duplication in efforts," he said. But growth plans means not everyone in duplicated operations will be let go.
"We have a strategy of redeploying technical people to other parts of the company that are growing, such as hybrid drive, which has a need for more engineers."