Cost pressures driving auto supplier M&As

Nov 30, 2004 | 05:40 AM | Philip Burgert

Soaring raw material costs will propel mergers of U.S. automotive suppliers as the industry continues to face a 20-year trend of downward pressures on auto prices, the automotive industry group of the International Network of Merger and Acquisition Partners (IMAP), Des Moines, Iowa, predicts.

"If 20 percent of your cost is in labor and you're providing a commodity-oriented product, you've probably been in trouble for some time," said Chas Chandler, a Detroit-based IMAP member who specializes in the global auto industry. "This wave of mergers and acquisitions we're seeing with auto suppliers will continue and may accelerate over the next year."....

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