Transcript New Business Models for Suppliers: Turning challenges into
New Business Models for Suppliers: Turning Challenges into Advantages
Jim McElya, President and CEO Cooper Standard Automotive January 18, 2006
Cooper Standard Automotive Who We Are
($ in millions)
Cooper-Standard Automotive
LTM Sept. 05 sales: $1,844 LTM Sept. 05 Adjusted EBITDA: $202 13,269 employees 48 locations Fluid Handling • LTM Sept. 05 sales (1) Body Sealing : $634 (1) : $893 % total: 34% • Global market position: #3 • % total: 48% • Global market position: #1 Direct, control, and transport fluids and vapors throughout a vehicle Seal the doors, windows, and other parts of the vehicle from water leakage and wind noise NVH Control • LTM Sept. 05 sales (1) : $353 • % total: 18% • N.A. market position: #1 Control and isolate noise and vibration in a vehicle and improve ride and handling
(1) Excludes corporate eliminations
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Divestitures/Other
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Holm Industries
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Oliver Rubber
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Winnsboro Exited Facilities
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Estover
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Langage
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Cleveland
Cooper Standard History
Cooper Engineered Products of Cooper Tire Sales: Products: Acquired October 1999 $425MM NVH, Sealing, Hose Acquired January 2000 The Standard Products Company Sales: Products: $1,100MM NVH, Sealing Siebe Automotive Sales: Products: $400MM Fluid Handling
CSA Division of CTR
Sold December 2004
Successful Integrations Brand-name Global OEM Supplier 3
The Future Looked Bright for Cooper Standard Automotive
Good Year for Sales & Profits 52 Plants 18,000 Employees The Year 2000 Environment for Success was Right
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The Future Looked Bright for the Industry
US auto sales headed for 2nd best month ever… Toyota expects to gain U.S. market share in 2000… Detroit Automakers posting healthy earnings… Ford says 2000 will set a record… Mitsubishi and DaimlerChrysler agree to alliance… DaimlerChrysler expects to top 2000 revenue goal… Ford to spin off Visteon… Supplier consolidation continues at rapid pace… Automotive trade exchange to be called Covisint… Competition heats up in Chinese auto market…
The Year 2000 Environment for Success was Right
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Industry Challenges
Foreign Automakers boost N.A. market share… Suppliers face tough times ahead… (9/11) U.S. Automakers suspend production… 0% financing brings back buyers… U.S. auto-parts makers resist more price reductions… Big suppliers reject DCX 5% demand… GM considers making more European cuts… Federal Mogul files for bankruptcy… Ford slashes production, warns of lower earnings… Rougher roads lie ahead for Japan’s automakers…
Environment for Success was Volatile
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What Have We Done Over Time?
$1.5 Billion USD in Sales 52 Plants 18,500 Employees Moved More Products to LCM Countries 1/3 of CSA Employees in LCM Countries Expanded into China $1.8B LTM 9/30/05 USD Sales 40 Plants 13,250 Employees Mexico Czech Republic Poland 2000 2005
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Results
$1,385.9 M USD Sales thru Q3 of ’05 $202M USD LTM 9/30/05 Adjusted EBITDA Solid Results; Others struggled The Year 2005
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Results
Acquired Rubber Hose Operation from Gates Equity Investment in Guyoung Tech Co.
Announced Acquisition Honored with Various Industry & Customer Awards
Fluid Handling Systems Division
The Year 2005
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Summary of CSA Advantages
Examine old business model Implement low-cost business model
Replace
Expand product lines & systems capabilities Eliminate Excess capacity Move operations to low-cost manufacturing countries Deal with material challenges & pricing issues
Achieved Increased Profits and Attained Status as a Global Player in Industry 10