forgot password?

  • Visitor Edition

 

Corporate Finance, M&A Article, restructuring for US automotive suppliers
Article at a glance:

The right restructuring for US automotive suppliers

US auto parts suppliers have tried to match the leverage of their big automaker customers by getting larger through mergers and acquisitions. But these efforts have largely failed, in part because the companies that undertook them sought scope in consolidation but didn't reduce competition significantly and therefore failed to lessen the influence of powerful buyers. Before acquiring any more companies, parts suppliers should carefully consider the goals of the next round of consolidation.

The take-away

Suppliers shouldn't seek to grow bigger for the sake of bigness itself but should instead seek to dominate a given product area while improving their processes in order to become more focused and efficient.

This article includes the following exhibits:
  • Exhibit 1: Auto suppliers' return on capital, 1970–2002
  • Exhibit 2: 1992–2002—the consolidation that wasn't
  • Exhibit 3: 'Niche' auto suppliers are more profitable

Additional Thinking

This Week's Featured Article

It’s hard for brand managers to keep pace with the shifting attitudes of Chinese consumers. But some trends can be discerned amid the noise.

Search full site

Register now. It's free and easy.

As a free member you can also:
  • Read hundreds of free articles
  • Receive e-mail newsletters and alerts
  • Search our archives

Simply fill in this form

View our privacy policy.

First Name* Last Name* Company* Job Title*

We will not share your e-mail.
See details.

E-mail* Password* Confirm Password*

*Required