Got car noise? Call Rieter Automotive. The North America division of Switzerland-based Rieter Holding manufactures and supplies acoustic and thermal management automotive components and systems for light vehicle and heavy truck OEMs. Based on plastics, fibers, and metal, the company produces devices from dash insulators to engine compartment liners, dampers, interior headliners, auto carpets and flooring, and trim. The company has about a dozen locations in the US and Canada and caters to major carmakers including the Detroit Big Three, Renault/Nissan, and BMW.
Reiter has taken a hit from the global economic crisis, high fuel, and rising raw material and steel prices, and the slowdown in North American vehicle manufacturing volumes. Its operating exposure is particularly tied to General Motors, with slightly more than half of Rieter's sales coming from the auto maker. (It makes about one-fourth of the carpet used in GM vehicles.) Reiter's response has included slashing manufacturing costs, cutting hours at plants, reducing headcount, closing plants, transferring manufacturing facilities to low-cost sites, and selectively increasing product prices.
The company has however persevered in maintaining its broad market position, in terms of both components and customer relationships. With weight reduction becoming one of the major requirements in auto engineering, it launched an aerodynamic underfoot module (incorporating Rieter Ultra Silent fiber material) in 2008. The lightweight, recyclable structure reportedly helps to reduce vehicle CO2 emissions and to absorb more noise. State grants and tax credits (awarded in 2007 for creating and retaining jobs in Ohio) have supported plant renovation and construction projects.
Rieter's performance has gained strength through a strategy of increasing its partnership and joint-venture facilities. For example, Illinois-based UGN is a partnership between Rieter and Nihon Tokushu Toryo, created in 1986 to produce acoustic, interior trim, and thermal management products for the Japanese automotive industry in North America. In 2005, Rieter increased its stake in the US-based car carpets manufacturer, Magee Rieter Automotive Systems, to 100%. It has also established another plant in Kentucky to manufacture carpets for Japan-based OEMs. – less