From the Detroit Free Press
NEW YORK — New York financier Wilbur L. Ross Jr. says parts of Delphi Corp. and Visteon Corp. could match up well with an auto supply company he’s attempting to build, but the timing isn’t right for making a deal.
Ross and Southfield, MI-based auto supplier Lear Corp. announced Monday a joint venture aimed at buying Collins & Aikman Corp. , a Troy, MI-based auto supplier in bankruptcy. The venture hopes to buy Collins & Aikman, which makes automotive interior components, and combine it with Lear’s auto interior systems business segment.
Ross, chairman and chief executive of WL Ross & Co. LLC , has said he wants to create a massive automotive supply company with the global footprint to match the automakers.
His investment firm owns a majority of Collins & Aikman’s $750 million in bank debt, which could give him part ownership and at least a say in the company’s future as it emerges from bankruptcy.
In addition to Collins & Aikman, Ross has expressed interest in other suppliers, including Delphi and Visteon, if they are put up for sale. Visteon recently spun out a set of plants as a separate company called Automotive Components Holdings LLC .
In an interview this week with the Free Press, Ross said parts of Delphi and the spun-out plants of Visteon could fit well with the new company his investing partners and Lear hope to create.
Both Delphi and Automotive Components have plants or divisions that make automotive interior parts such as instrument panels and seat fabrics.
It’s too early, though, to talk in earnest about buying Delphi, Ross said. The company filed for bankruptcy earlier this month but hasn’t been put up for sale.
Delphi also has some key issues, like its contract with the UAW, to work out, Ross said. “Delphi needs to do a few more things before anyone could do something with it,” he said.
Delphi can’t speculate on outside investors or companies interested in buying Delphi, said spokeswoman Claudia Baucus. The company is not at the point of considering options, such as selling all or part of its operations, she said.
But at a bankruptcy meeting in New York this week, Delphi Chairman and Chief Executive Steve Miller said Ross’ overall goal of creating a large automotive supplier has a good chance of success.
Miller served as chairman and chief executive of Bethlehem Steel in 2001 during its financial difficulties. Ross and his partners bought Bethlehem Steel and several other struggling steel firms, combining them and selling them earlier this year for $4.5 billion as International Steel Group.
The auto supply industry could use consolidation, too, Miller said.
“The market is headed for global category killers, three or four that dominate and that have the technology and investment expertise to handle that component category, so what he is trying to do is very much in line with global trends,” Miller said. “Yes, there is plenty financial support for capable consolidators like Wilbur Ross.”
Unlike Delphi’s management, the new chief executive of Automotive Components has said the company is looking for buyers.
Ross, though, said he and his partners are focusing first on the possible deal for Collins & Aikman.
“For the moment, the only thing we’re really active on is the investigation of Collins & Aikman,” he said.
The bankruptcy court would have to approve an auction and sale before it could take place. With Lear as a partner, Ross said his group should have a good chance if Collins & Aikman goes up for sale.
“We think our combined team is the logical bidder,” he said.
Copyright (c) 2005, Detroit Free Press
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