TRW

About TRW

TRW Automotive makes cars stop and go around the globe, in addition to keeping passengers and pedestrians safe. The company designs and makes systems, components, and modules primarily for major automakers. Three OEM groups generate more than 45% of sales: Volkswagen (21%), Ford (16%), and General Motors (11%). Product lines range from chassis systems – more... (brake, steering, and suspension systems) to safety systems, such as airbags, seat belts, and security and safety electronics (crash and occupant weight sensors). Other products include body controls and engine valves. TRW Automotive has about 190 facilities in more than two dozen countries worldwide, netting nearly 70% of its sales outside North America.

Geographic Reach

TRW operates globally with a focused presence within Brazil, China, the Czech Republic, Germany, Poland, Spain, the UK, and the US. Europe accounts for almost 50% of its total sales each year.

Operations

TRW divides its operations across four chief segments. Chassis Systems generates the most revenue (around 60% of total sales) and makes brake control, steering, and linkage and suspension products. Occupant Safety Systems (around 20% of sales) makes airbags, seat belts, steering wheels, and other related products, while Automotive Components (10%) makes engine valves, body controls, and fasteners. Electronics (5% to 10%) manufactures radio frequency and electrical components used to make electric power steering, vehicle control, and safety systems.

Financial Analysis

From 2010 to 2011, TRW increased its revenue by 13%, due in part to higher production volumes in all its major geographic regions and an uptick in demand for its active and passive safety products. TRW's cost savings initiatives and restructuring activities in 2010 helped it to achieve a net income in 2011 of $1.16 billion, which constituted a 39% jump over 2010's net income of $834 million. The company had $163 million in net cash for 2011 and has used excess cash generated in 2010 to open new plants in China and Brazil. TRW invested more in 2011 and planned to spend between $650 million and $700 million on capital expenditures in 2012.

Strategy

TRW caters to a diverse client base by partnering with other companies with innovative technologies and opening new plants in key geographic locations that expand the company's presence in new and existing markets. In 2012 it launched in Brazil a new regional production base for making auto parts across South America. The newly launched facilities are focused on producing and selling electric power steering parts and components. The company also announced plans in 2011 to open a new braking plant in Mexico.

The company enters into joint ventures for strategic reasons, as well. In 2010 TRW subsidiary TRW Asia Pacific Co. inked a deal with Xi'an Dong Fang Group Co., a division of China North Industries Group Corp. This venture with one of China's major machinery companies established an airbag inflator and seat belt pretensioner plant in Xi'an, Shanxi Province -- a mountainous frontier centered around coal and chemical production. To support its Chinese customers, TRW announced in 2011 its plans to build a new technical center in Shanghai in 2013. Other significant partnerships have been established in Brazil, India, and Spain.

Ownership

The Blackstone Group owns a 16% stake in the company. – less

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