The global automotive seats industry

This chapter witnesses extensive M&A spanning the last few decades, with the triumvirate of Adient, Lear and Faurecia today controlling nearly 80 percent of this approximately US$60 billion market. Moreover, it shows the pitfalls of an overly aggressive debt-laden acquisitions strategy adopted by Lear in the 1990s, which led to its eventual filing for Chapter 11 bankruptcy protection. The aim of this study is to expose the vulnerability of these supposedly powerful suppliers and the incredible pressure compelling them to use acquisitions as a means of satiating ever-increasing demands for economies of scale and scope, and next-generation technology; in the drive to meet rising safety regulations and escalating consumer demand for amenities, convenience and comfort, the humble car seat has become a technologically complex product with embedded microprocessors. This chapter looks at extensive mergers and acquisitions spanning with the triumvirate of Adient, Lear and Faurecia controlling nearly 80 percent of this approximately US$60 billion market. It explores the vulnerability of the supposedly powerful suppliers and the incredible pressure compelling them to use acquisitions as a means of satiating ever-increasing demands for economies of scale and scope, and next-generation technology. Back in the 1980s, the global automotive seats industry was in a manner of speaking, 'non-existent', and seat making, if it was carried out by a supplier, was an inconsequential and unprofitable activity. By the beginning of the 1990s, an oligopolistic market was starting to form in the global automotive seats industry, with Lear and Johnson Controls Incorporate (JCI) spearheading the change. Lean has played a critical part in ensuring JCI's rise to the top of the global automotive seats industry.