Experiences vary by company, and indeed, some suppliers reported higher 2022 profits than in 2019. BorgWarner Inc.’s net earnings, for example, came in at $944 million for 2022, up 27 percent from 2019. BorgWarner hopes to hit a breakeven point on launching its electrification business as soon as this year.
“My impression is that things are more bifurcated than they have been in the past,” said Mark Wakefield, managing director at AlixPartners. “You have people truly doing well and growing profitably, and then you have a group at the other end. Usually, you have a big bump in the middle, with a few companies at either end doing well or poorly.”
Much of the divide between the suppliers faring better and those doing worse stems from how successful companies have been in obtaining price increases from automaker customers, Robinet said.
“You have a situation where some suppliers have been able to come in and get price increases because of the labor, logistics, energy and other material price increases — but others haven’t been as successful,” he said.
Companies that rely on a just-in-time delivery model also have been hurt more than other suppliers, Wakefield said. Volatility in automakers’ vehicle assembly schedules generally hurts them more than others, he said.
The gap between what an automaker expects to produce and what it actually produces in a given week is “something that didn’t exist nearly to this degree in 2019,” Wakefield pointed out. “That’s hit the just-in-time companies hard.”