DelGrosso: "Well done" at Chassix
When Doug DelGrosso becomes CEO of Adient on October 1, he does not have to start his turn around the wrestling seat maker again.
Interim CEO Fritz Henderson – who will be non-executive chairman in the transition – has already announced a back-to-basics plan to save costs, improve quality and focus on traditional seat customers.
DelGrosso, 56, is a smart choice to implement that strategy. For 23 years at Lear Corp. DelGrosso moved to COO before leaving in 2007. More recently he led the turnaround of the bankrupt chassis component supplier Chassix.
"He did well" at Chassix, said Steve Wybo, senior managing director at Conway MacKenzie Inc. "He has a seat background and a turnaround under his belt."
Henderson: explains the basis
Adient is the world's largest maker of car seats, but struggles to make money despite the still strong sales of North American cars. The company lost $ 1.5 billion in 2016, recovered last year with a net profit of $ 877 million, and then collapsed again. CEO Bruce McDonald resigned on June 11 after Adient announced a quarterly loss of $ 168 million.
Henderson, a former CEO of General Motors with a reputation for cost control, wasted little time on identifying Adient & # 39; s missteps. A week after McDonald left, Adient canceled a $ 100 million plan to move its headquarters from Plymouth, Michigan to Detroit.
Operators of the company also questioned the $ 360 million purchase by Adient from chairmaker Futuris Group in 2017. Futuris was founded in Australia in 1967 and produces chairs and other parts for various Chinese car manufacturers.
It also delivered Tesla, Ford and GM in North America, and Adient relied on targeting start-up West Coast EV startups. That turned out to be a bad guess after Tesla decided to place his seats internally.
"We are a bit distracted," said Adient's chief technology officer, Detlef Juerss, at an industry presentation on July 30 in Traverse City, Mich. "We are now moving towards a focus on day-to-day operations .. not just the finer things in life."
Those daily problems include high demolition costs, rising steel costs and glitchy product launches. The chair structures and mechanisms division of Adient have suffered chronic losses.
"There has been a lot of trouble in the segment," Wybo said. "The suppliers have won each other, it is just one of those product lines with too much competition."
Adient has some strengths. The company is profitable in China, and its 33 percent share in the global chair industry gives it access to virtually all major automakers.
But Adient has done its best to regain the momentum since it was completed in 2016 by Johnson Controls Inc. And now that car sales in the United States and China are starting to stagnate, Adient's turnaround can be difficult.