You’d think there might be fireworks, or at least a brass band out front. After all, how many other $3.15 billion companies can crow about average revenue growth of 31 percent over the past 11 years, including a 61 percent jump in sales last year? But this is Lear Seating Corp., where modesty is the byword-even when you’re the world’s largest independent producer of automotive and light truck seats.
“We have a frugal philosophy,” explains Kenneth L. Way, the Southfield, MI-based company’s mild-mannered chairman and CEO. He attributes Lear’s success to dogged attention to the fundamentals: low overhead, strong cash flow, customer service, and unflagging product-development.
That, and fortunate timing. Established in 1917, the company was set up along traditional lines to manufacture seat components and deliver them to automakers who performed the final assembly. But in the early 1980s, Lear discovered Japanese lean manufacturing methods and the close relationship between Japan’s car companies and suppliers. At the same time, slumping sales made U.S. automakers ripe for fresh ideas about cutting costs and improving quality.
Lear built factories near auto plants to deliver fully trimmed seats on a just-in-time basis that parallels the assembly line flow. “Lear is one of the fastest-growing suppliers and probably the low-cost producer in the industry,” says analyst Scott Merlis at Morgan Stanley in New York.
Lear now sells complete seats, headrests, and armrests-along with hardware for companies that still prefer to do it themselves-to almost every major vehicle manufacturer in the world through 79 facilities located in 17 countries. Lear is not alone, of course. Its chief rival, $6.8 billion Johnson Controls in
Way, 55, figures his company’s revenues will reach $4 billion in 1995. Some growth will come from further acquisitions, but he says most of it will be driven by new products, including fancier seats and interior trim items. Lear also is expanding operations in
As for Lear’s global strategy, Way insists it doesn’t have one. “We didn’t even know we were a global company until a few weeks ago,” he says with a smile. “But we were doing a lot of traveling, so we knew something was going on.” Having said that, he’s back to work, quietly.