Blog: Valeo wants Visteon
Dave Leggett | 18 August 2006
It's reported that Valeo could be interested in buying Visteon. I’d give the reports some credence, as Valeo is interested in growth through acquisitions and also has a long history of interest in increasing its presence in the US.
I recall interviewing Valeo CEO Thierry Morin in his Paris office a few years ago. For a guy who is an accountant by training, his enthusiasm over the latest technologies and Valeo’s future growth strategy was impressive. He’s a man with a vision.
During the course of the interview, Morin maintained that he saw a big opportunity for Valeo in the US marketplace. In particular, he envisaged Valeo as a supplier adding value, with leading edge technology, that could help the Detroit Big Three to move away from a prevailing cost-down mentality (in relations with suppliers) and in the process actually improve customer perceptions of its products. It was an interesting argument, I thought.
While Valeo has seen its profits fall lately, mainly on higher raw material costs, it is still a relatively strong performer and expanding rapidly. Morin – the man who turned Valeo around at the beginning of the decade – is continuing to deliver.
If Visteon - or a substantial chunk of it - ends up in Morin’s hands, Detroit could find that it has an even more powerful, switched on and potentially very helpful Tier 1 supplier in its midst. A nettle to grasp that could be beneficial. And it could be a smart move for Valeo, massively strengthening its US market (and global) presence at relatively low cost.
On a related note, there was research published earlier this week by consultants Roland Berger on supplier strategies. It forecasts suppliers accounting for an increased percentage of the value-added in vehicle production globally as hard-pressed vehicle makers require their suppliers to assume more engineering and design responsibilities.
Roland Berger’s suggestions for supplier strategies must be music to Thierry Morin’s ears. And financially challenged Ford and GM might be a particularly fertile furrow for Valeo to plough in the coming years, especially with the possible addition of Visteon’s business in the case of Ford.
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