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Interview Synopsis

Cooper-Standard – tier 1 automotive supplier update & near-term headwinds

  • Credit
  • Consumer
  • North America

“The COVID thing is a big deal. It’s affecting everybody the same way”, a former VP from Cooper-Standard Holdings Inc told Third Bridge Forum. However, they continued, “there are a couple of big, key dimensions to it”, including lower vehicle production owing to chip shortages. In turn, this means that original equipment manufacturers are focusing on cars with higher margins such as pick-up trucks and SUVs.

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Another critical issue is material shortages. “It used to be that there was the occasional spike in some weird, odd material for some reason. Maybe the price of oil went up, or the price of copper went up, but right now we have a case where all of this, everything, is going up. It’s materials that I never would have dreamed.” They pointed to polymers, which were “the most stable material you could buy from a pricing standpoint”, going up by 40%.

We also heard about Cooper-Standard’s strengths. One is its customer relationships, which the specialist said has always been a focus for the company. They also pointed to its worldwide footprint, which lowers the logistics costs for the customer: “Cooper has invested at the request and really, frankly, at the need of their OEM customer base, and they have factories in relatively close proximity to where product is consumed.”

Electrification is “a big topic”. The former VP discussed how Cooper-Standard’s products tie in with the move to electric vehicles. One such area is cooling systems. “On the cooling side, this is an opportunity, because while an internal combustion engine [ICE] vehicle has a lot of  cooling capacity required…so does an electric car… All of that means you, frankly, will end up with more cooling capacity required in an electric vehicle than in an ICE.”

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