Adient stumbles, but barrels ahead

by admin February 20, 2018 at 6:58 am

McDonald: Still making progress

Adient got an unpleasant surprise last month on the road to remaking itself into a seat supplier for autonomous and electrified vehicles of the future: Old-fashioned cost problems zapped its quarterly earnings.

Launch problems, difficulties obtaining certain specs of metal, higher steel prices and the loss of some customers for its seat structures and mechanisms business caused headwinds that blew the company back. The company reported a net loss of $216 million attributable to Adient operations, on revenue of $4.2 billion for the quarter ending Dec. 31.

But CEO Bruce McDonald is assuring the industry that Adient — now just more than a year into independence from Johnson Controls — is still making progress.

“Unfortunately, and rightly so, the challenges impacting our seat structures and mechanisms is casting a shadow over our whole business,” McDonald said last month in a conference call with investors. “Obviously, we need to continue to make the investments that we’ve talked about to get the business back on growth trajectory.”

Despite making big strides forward last year, the quarter left Adient hemorrhaging cash from core operations.

Adient was banking on cash from the seat structures unit to fuelthe company’s future plans, and it is now scrambling to get back on track.

But the difficulties ahead will not derail Adient’s long-range efforts to become market leader in the new world of electric and self-driving vehicles, McDonald said. The company is working on new fabrics, lightweighting, safety and integrated technology in seats, and developing autonomous-drive interiors that might not be commercialized for another decade.

Clockwise from top left: a Futuris seat that links Adient to Tesla, a flexible seating concept and the AI18 concept vehicle to prepare for movable seating plans. Photo credit: AUTOMOTIVE NEWS ILLUSTRATION

Part of that work is perfecting seating arrangements that can move freely once drivers and passengers no longer have to sit looking straight ahead. But Adient wants to be ready immediately, as new modes of driving emerge.

“We’re building this stuff now,” Tom Gould, Adient’s director of industrial design and craftsmanship, told Automotive News. “If a customer wanted to do something like this in the next launch cycle, there’s not a ton of new development that needs to happen.”

The transformation plan that was the driving force behind Adient’s 2016 spinoff from Johnson Controls also includes penetrating the electric vehicle business, which demands new types of lightweight seats. In September,Adient spent $360 million to buy Futuris Group, an Australian supplier with one U.S. production customer — Tesla.

The former Futuris plant in Newark, Calif., opened in 2014, sits less than 10 miles from Tesla’s assembly plant in Fremont. Adient absorbed its contract to design and manufacture the seats and headliner modules for the Model S sedan and Model X crossover.

Electrification presents its own challenge for automakers. EV batteries weigh more than traditional combustion engines, and automakers are looking to suppliers to offset the weight with lighter components.

Adient is experimenting with multimaterial seat structures and altering foam formulas to make seats thinner. The company said it has trimmed seat weight by 20 to 30 percent over the past 10 years, and aims to shed 22 pounds from its standard seat structures by 2020.

Source link

more news from the blog

Add Comment