The 31st Annual Gabelli Automotive Aftermarket Symposium. Lear s Asian Strategy

Transcription

1 The 31st Annual Gabelli Automotive Aftermarket Symposium Lear s Asian Strategy October 31, 2007

2 Agenda Company Overview Bob Rossiter, Chairman, CEO and President Lear s Asian Strategy Lou Salvatore, Senior Vice President and President, Global Asian Operations Q and A Session 2

3 Lear Profile Lear is... a leading global supplier of automotive Seating systems, Electrical Distribution systems and Electronic products; that serves all of the world s major automakers; with annual sales of $15 billion (Fortune #155); 236 facilities located in 33 countries; and more than 90,000 employees worldwide 3

4 Actions to Improve Shareholder Value* Implementing global restructuring initiative Refinanced debt maturities Divested Interior business; retained minority interest in IAC joint ventures Improved operating earnings and cash flow Revitalized strategic focus on growth * Please see slide titled Forward-Looking Statements at the end of this presentation for further information. 4

5 Strong Competitive Position Lear is a true partner to all of the world s major automakers, with strong market positions and superior quality in our core businesses: Seating Systems #2 position globally, in a market estimated to be about $45 to $50 billion in size: #2 position in North America and #3 in Europe #2 position in China and #1 in India Lear is the highest quality major seat manufacturer for the past 6 years, according to the J.D. Power Seat Survey Electrical Distribution Systems #3 position in North America, #4 in Europe and among the leaders in China Electronic Products Niche player in electronic modules, wireless products and audio/video applications Source: Lear Market Share Study / CSM Worldwide Survey Data 5

6 Lear s Business Imperatives* Superior quality and customer satisfaction Global scale in core businesses Technical competence in key components Lowest cost global footprint New product innovation Sales growth and diversification * Please see slide titled Forward-Looking Statements at the end of this presentation for further information. 6

7 Lear s Asian Strategy 7

8 Forward Looking Trends* Consumers Growth in vehicle ownership Growth in micro and small cars Exports Increased exports from Asia to N.A. / Western Europe Domestic OEMs Government targeted domestic OEM share = 50% Supply Chain Customer ownership of supply chain Geographic Customers (and government) driving localization (components) Emerging Market India -- the next China (5+ years away) Asian Market = Continued Growth 8 * Please see slide titled Forward-Looking Statements at the end of this presentation for further information.

9 Asian Market Growth* Production Volumes CHINA =2.5M High: CAGR% China 6.8 M 9.3 M 2.5 M 11% India 1.8 M 3.4 M 1.6 M 24% INDIA =1.6M Thailand 1.3 M 1.6 M 0.4 M 9% Sub-total High 9.9 M 14.3 M 4.5 M 13% THAILAND =0.4M Low: Japan 10.7 M 11.3 M 0.6 M 2% Indonesia 0.3 M 0.5 M 0.2 M 17% Taiwan 0.3 M 0.4 M 0.1 M 11% Malaysia 0.5 M 0.6 M 0.1 M 9% Korea 3.9 M 3.9 M 0.0 M 0% Philippines 0.1 M 0.1 M 0.0 M 12% Australia 0.4 M 0.4 M (0.0)M 0% Sub-total Low 16.1 M 17.2 M 1.1 M 2% Total Asia 25.9 M 31.5 M 5.6 M 7% Source: CSM Worldwide, Inc., Global Light Vehicle Production Report, June vs Asian Market Growth = 7% CAGR High Volume Asian Growth (China / India / Thailand) = 13% 9 * Please see slide titled Forward-Looking Statements at the end of this presentation for further information.

10 Lear s Asian Strategy* Sales Growth Aggressively grow faster than market Focus on local OEMs Strategic acquisitions (gain market share) Expand seat customer relationships to other products Profitability Lowest cost designs for customer specification Vertical integration (components) Manpower Emphasize local talent / leadership Quality Operational excellence Best-in-class launch execution Lear s Asian Strategy = Growth, Local Markets, Optimized Costs, Local Leaders 10 * Please see slide titled Forward-Looking Statements at the end of this presentation for further information.

11 Aggressively Expanding Our Presence in Asia China 19 manufacturing facilities, 6 new in new engineering/r&d centers in Shanghai (includes CTO activities) 18 program launches in program launches in customers Seats (#2), Electrical Distribution (among the leaders) and Electronic products India 7 manufacturing facilities, 3 new in engineering center in Mumbai 3 program launches in program launches in customers Seats (#1) Korea 2 manufacturing facilities 1 engineering center in Seoul Seats ASEAN 2 manufacturing facilities 1 engineering/cto center in Cebu, Philippines 14 program launches in 2007 Seats, Seat Trim Japan 1 engineering center in Atsugi (Tokyo) 1 engineering center in Hiroshima 37 Manufacturing / Engineering Facilities in Asia and Growing Note: Includes facilities held through consolidated and non-consolidated joint ventures. 11

12 Lear China Customer Value Workshop Opening Ceremony with Lear and Chery Executives - Wuhu, China 12

13 Geely Signing Ceremony Geely Signing Ceremony 13

14 BAI Delegation Visit Signing Ceremony with Lear and BAI Executives at Southfield HQ 14

15 New Partnership Lear Joint Venture with JAC LOI Signing Ceremony with Lear and JAC Executives in Hefei, China 15

16 Shanghai, China Lear Engineering, Technical & Profit Improvement Center China Engineering Center / China Technical Center / China Profit Improvement Center Co-Location 16

17 Asia Profit Improvement Center Trim Wiring + Tracks Foam Idea Generation Section Asia PIC = Lowest Cost Designs For Each Customer Specification 17

18 2007 Customer / Industry Recognition Shanghai GM Wuling Supplier of the Year (China Liuzhou plant 2006; first time awarded to a seat supplier) Mazda VA Proposal Performance Award for substantial contribution to cost reduction initiatives (2006 ; also received in 2004) Hyundai Mobis one of outperforming suppliers in 2006 (July 2007) FAW-Volkswagen Best Seat Supplier Award (Changchun Lear - May 2007) 2007 = Continued Customer / Industry Recognition for Performance Excellence 18

19 2007 Customer / Industry Recognition Labor Ministry of Thailand Achievement of three million man hours without injury (July 2007) Labor Ministry of Thailand APC Awarded Excellence in Safety Management (May 2007) Auto Alliance Thailand -- Achievement of one million seat sets built and delivered (July 2007) Toyota Superior Award for Supplier Diversity 2006 for the 3 rd consecutive year (March 2007) 2007 = Continued Customer / Industry Recognition for Performance Excellence 19

20 Aggressively Growing Total Asian Sales* Total Asian Sales Core Businesses ($ in millions) ~$2,850 $2,200 $1, Highlights Significant market position in China: Total sales > $700 million ** Supply 20+ OEMs on > 100 vehicle programs 19 manufacturing facilities with approximately 6,000 employees 2 new engineering/r&d centers in Shanghai Our fastest growing market Outlook 11 new facilities in India and China supporting Ford, Mazda, Chery, Tata, M&M, BMW and Hyundai Consolidated Non-consolidated * Includes sales in Asia and with Asian manufacturers globally. Please see slide titled Forward-Looking Statements at the end of this presentation for further information. ** Includes consolidated and non-consolidated sales. Targeting Continued Growth 20

21 Key Drivers For Profitable Growth* Lowest cost designs for each customer specification Localized engineering Localized component sourcing Best-in-class local talent Vertical integration (quality / cost) Continuous improvement and lean initiatives Operational improvements Export low cost engineering and components to ROW Profitable Growth = Strong Plans Will Succeed *Please see slide titled Forward-Looking Statements at the end of this presentation for further information. 21

22 Closing Comments 22

23 Lear s Asian Strategy* Sales Growth Aggressively grow faster than market Focus on local OEMs Strategic acquisitions (gain market share) Expand seat customer relationships to other products Profitability Lowest cost designs for customer specification Vertical integration (components) Manpower Emphasize local talent / leadership Quality Operational excellence Best-in-class launch execution Lear s Asian Strategy = Growth, Local Markets, Optimized Costs, Local Leaders 23 * Please see slide titled Forward-Looking Statements at the end of this presentation for further information.

24 Q and A Session 24

25 R R ADVANCE RELENTLESSLY LEA Listed NYSE 25

26 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. Actual results may differ materially from anticipated results as a result of certain risks and uncertainties, including but not limited to, general economic conditions in the markets in which the Company operates, including changes in interest rates or currency exchange rates, the financial condition of the Company s customers or suppliers, fluctuations in the production of vehicles for which the Company is a supplier, disruptions in the relationships with the Company s suppliers, labor disputes involving the Company or its significant customers or suppliers or that otherwise affect the Company, the Company's ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions, the outcome of customer productivity negotiations, the impact and timing of program launch costs, the costs and timing of facility closures, business realignment or similar actions, increases in the Company's warranty or product liability costs, risks associated with conducting business in foreign countries, competitive conditions impacting the Company's key customers and suppliers, raw material costs and availability, the Company's ability to mitigate the significant impact of increases in raw material, energy and commodity costs, the outcome of legal or regulatory proceedings to which the Company is or may become a party, unanticipated changes in cash flow, including the Company s ability to align its vendor payment terms with those of its customers, the success of the Company's restructuring initiative and other risks described from time to time in the Company's Securities and Exchange Commission filings. The forward-looking statements in this presentation are made as of the date hereof, and the Company does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date hereof. 26