3 Min Read
(For more stories on the National Summit, please double-click on [ID:nN15235398])
* Linamar can break even at 8-10 mln unit production
* Recovery will be slow, take at least five years
* Not interested in taking over weaker rivals
DETROIT, June 16 (Reuters) - Canadian auto parts maker Linamar Corp (LNR.TO) does not see any near-term spike in auto production volumes in North America, but aggressive cost cuts have sized the company for a break-even at current depressed levels, its chief executive said on Tuesday.
Chief Executive Linda Hasenfratz also said the company was in a "much stronger" position than other auto suppliers on the balance sheet front but has no interest in acquiring weaker rivals because it does not need additional capacity.
"Production has never been worse but once we get through this period of restructuring, the situation will improve. It's certainly my feeling that we're at the trough at the moment," Hasenfratz told Reuters on the sidelines of the National Summit in Detroit.
"But it will be a slow recovery; I don't expect to see a spike in terms of production in the coming months or even next year."
Hasenfratz said most automotive suppliers have right-sized their organizations to break even somewhere between 8 million and 10 million units of production.
"So just as soon as we get over that level, those companies will start to be profitable again, with ourselves included," she said.
The auto parts industry has been in crisis due to the steep decline in global auto sales. The Chapter 11 bankruptcy filings at Chrysler and General Motors Corp GMGMQ.PK, and the temporary idlings of their plants to cut production and reduce inventory, have added to the difficulties.
Hasenfratz said the company has maintained a "reasonably good" balance sheet but has little interest in taking over weaker rivals at this point.
"I would be much more interested in taking over work," Hasenfratz said. "We have a great deal of assets open and available. I don't need additional capacity," she added. (Reporting by Soyoung Kim, editing by Matthew Lewis)