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SCOTT JAGOW: You know all about the problems facing American carmakers, but some hedge funds and private equity firms think the auto-parts industry might be a good investment. This week, a bidding war for parts-maker Delphi could start taking shape. Marketplace’s Bob Moon has more.
BOB MOON: Detroit’s big automakers might be struggling, but University of Maryland business professor Peter Morici suggests the companies that make the parts are piecing themselves back together, thanks to overseas carmakers setting up shop on a growing basis here.
PETER MORICI: “Toyota is increasing its capacity in the United States, will be looking for more suppliers, for bigger orders from the supplies that it has. The same goes for Nissan and Hyundai and Kia. In fact, Kia has announced its going to start exporting to Latin America from the United States. The auto-parts sector would ride that wave.”
Morici says Lear Corporation’s North American auto-interiors business, for one, is well-positioned to capitalize on that growth.
MORICI: “Automotive interiors are very difficult to ship across the ocean. Whole dashboards are very bulky, relative to their value.”
He also expects the former GM parts unit Delphi to emerge from bankruptcy with leaner labor costs and streamlined profit potential.
In Los Angeles, I’m Bob Moon for Marketplace.