SUPPLIERS Not so Bad - Supplier financials outperform N. American OEMs

摘要

Bankruptcies and plant closings grab the headlines, and some supplier surveys suggest this is an awful time to be in the auto parts business. One automotive consulting firm begs to differ. A.T. Kearney, of Southfield, MI, releases its ninth annual Townsend study of the global auto industry, which evaluates the outlook for steel, oil and health-care costs, as well as the financial performance of 124 auto makers, suppliers and dealers in the light- and commercial-vehicle sectors. Surprisingly, A.T. Kearney finds North American and European Tier 1 suppliers exceed the financial performance of Asian suppliers, based on Kearney's metric known as CFRIC (cash flow return on invested capital), which is a measure of the capital necessary to generate cash. Over the past three years, CFRIC has been growing for North American suppliers. In addition, based on CFRIC, those suppliers have outperformed their North American auto maker customers by a wide margin in each of the past nine years, says William Windle, A.T. Kearney vice president, who helped lead the study.