Business Case Studies, Restructuring / Turnaround Strategies Case Study, Lear,Restructuring Strategies

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Restructuring / Turnaround Strategies Case Study

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Case Title:

Lear: The US Automobile Parts Maker's Restructuring Strategies

Publication Year : 2006

Authors: R.Muthu Kumar, Sumit Kumar Chaudhuri

Industry: Automobiles

Region:USA

Case Code: RTS0070

Teaching Note: Available

Structured Assignment: Not Available

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Abstract:
Southfield (Michigan)-based Lear Corporation, one of the world's largest suppliers of automotive interior components and systems, provides complete seating systems, interior trim products and electrical & electronics systems. Since 2000, the company has been witnessing flat sales and increased raw material costs. Further, it has also been hit by declining business from its major customers like GM and Ford that have reduced production in the face of stiff competition from Asian carmakers. To minimise its losses, Lear has announced a global restructuring plan in June 2005, which includes factory closures in North America and Western Europe apart from transferring some of its manufacturing facilities to low-cost regions like Eastern Europe and Asia.

Pedagogical Objectives:

  • To discuss the restructuring strategies of Lear while highlighting the perils of over dependency of any supplier on a handful of major customers.

Keywords : Lear Corporation; Automobile parts manufacturing market; Automobile interior manufacturers; Auto industry; Cost cutting; Expansion strategies; Restructuring / Turnaround Strategies Case Study; Localisation; Restructuring strategies; Delphi; Visteon; Acquisitions and partnerships; Competition; Market share; Oil prices; Challenges for Lear

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