BRUSSELS - Robert Rossiter is off to a fast start since moving to Germany to run Lear Corp.'s international operations.
After three months Rossiter is a third of the way to achieving his goal to double European sales within five years. Rossiter is doing it so far with acquisitions.
Rossiter is Lear's No. 2 executive. His move to Europe was announced in April and he is still operating from temporary offices at the Lear plant at Gustavsburg-Ginsheim, Germany. He moves to permanent offices in Sulzbach near Frankfurt in July.
Rossiter will eventually have a team of 35 to run all of Lear's operations outside the Americas.
In 1996, Lear's sales in Europe totalled $1.7 billion. Lear's 1997 sales in 1997 will be an annualized $2.2-$2.3 billion when the acquired businesses are fully consolidated.
Lear has made three acquisitions in Europe so far this year.
The biggest was last month's purchase of Keiper Car Seating GmbH & Co. for $235 million from Putsch GmbH & Co. KG. Keiper had sales of $615 million in 1996. It has 10 plants around the world and supplies seats to Mercedes-Benz, Audi and Porsche.
The deal still needs approval from European competition authorities.
Keiper's 6 percent market share takes Lear's share to 23 percent of the European seating market.
The move was strategically important because it strengthened the company's position in the European premium-car business. Lear already supplies BMW, Jaguar, Saab and Volvo.
Putsch retains Keiper GmbH, the seat components business, but Rossiter said that Lear has an excellent relationship with the Putsch family and will continue to purchase from their company.
Lear has also been growing its non-seat interior systems business.
Only 21 percent of Lear's sales in Europe involves interior systems other than seats. Globally, seats account for 65 percent of Lear's sales. The long-term goal is for half of European sales to come from interior systems.
Lear plans to expand in several areas: door modules, floor and acoustic systems, headliners and instrument panels. In March Lear acquired the Czech headliner manufacturer Empetek sro. It already has headliner operations in the UK.
Lear is also building up seating component makers. Last month it announced plans to acquire Dunlop Cox, a manufacturer of electrical and manual seating mechanisms, from BTR plc, the UK-based conglomerate. Dunlop Cox employs 400 and had 1996 sales of $39.2 million.
The acquisition will add seat tracks to Lear's European portfolio. Dunlop Cox products are used on Lear seats assembled in the UK and Sweden. Lear will also use them in a major new program in the US.
Rossiter sees no conflict between building up Lear's inhouse capability and continued sourcing from competitors. Lear buys a lot of seat components from Bertrand Faure in Italy, for example, and has a joint venture in the UK with Sommer-Allibert making floor systems.
'We're not trying to put each other out of business,' said Rossiter. 'We all fight real hard for a brand new program, but once the business is sourced we look hard at how we best use each others' assets so that we don't duplicate.'
Lear grew at a compound rate of 62 percent in Europe between 1991 and 1996. Profit margins in Europe are not as good as in North America, but Rossiter says that they can be.
Sepi, acquired from Fiat in 1994, took a long time to produce acceptable returns. But that work was done before Rossiter came to Europe in his new role. He said that Lear 'is making good money there now.'
Further cost reductions will come through more global purchasing and improved practices, said Rossiter.
Selling prices for seat sets are in the $500-$700 range in both Europe and North America. But such components as covers, fabrics or foam bought by Lear in Europe cost more.
One reason is that purchasing in Europe is fragmented and suppliers are often small and nationally based.
In 1996 Lear's purchasing volume in Europe was $1.4 billion, spread among 9,000 suppliers, excluding Keiper suppliers. In North America, Lear spent $4.4 billion among 900-1,000 suppliers.
Rossiter also sees opportunities to simplify manufacturing facilities and reduce inventory. And he said Lear may also be able to reduce costs through standardized packages, particularly at Keiper.
'There are a lot of options and variants,' he said. 'We had the same situation in North America and we learned to offer our customers a number of packages, to add more features to each of the systems to give the consumer more value and at the same time lower prices.'
Rossiter wants to demonstrate Lear's total interior systems capability to European carmakers.
Lear hopes that a carmaker in Europe will award a contract for integrated complete interiors in the next three to five years.
There are no pending contracts for complete interiors in Europe, but everyone is interested in the idea, said Rossiter.