Hi Noblesse,
You posted "the only important event at today's annual meeting was a question from the floor on the likelihood of a spinoff of the Automotive Safety Division." Well, thank you, although I must say I was only following up on the strategy you have championed the last couple of weeks. As Michael correctly noted, Mr. Townsend said there had been no meetings to discuss the topic and did not say it would be discussed at today's Board meeting (although he did preface his comments with "there's been a lot of talk about that (a spinoff) recently" -- maybe referring to conversations with analysts, or you?).
There were two other items I found to be noteworthy during the Q&A session. First, in respect to the commercial airline seats, when asked what he expected pretax profit margins to be after plant consolidation, Mr. Townsend eventually conceded that they expected to be in the same range as their competitors, roughly 12-16%. The actual estimate is apparently *top secret*, to the point that the SEC forbids disclosure of such information (I'm not joking -- this was "explained" to us by Mr. Townsend when the question was asked!!)
The other item is some of the comments made by Mr. Smith, the new board member from TRW. When asked which auto companies TRW has agreements with (obviously not just for SMU products), Mr. Smith said pretty much all of them. Upon further questioning, he noted that the European auto market is the first to embrace new safety technology, followed by the US, then Asia. When Mr. Townsend reiterated this, it sounded to me, and this is pure speculation, that the new contract they just announced is for another European auto maker, and the discussions they're in for the next two customers are potentially US (versus Japan). If the firm contract is with Mercedes (for two platforms), wouldn't Chrysler be a nice (and logical) follow on? Does Mercedes have a formal agreement with Autoliv, or is that just the way we thought they were leaning? As I recall, there was a belief that Mercedes didn't want to have a "me too" system since BMW was the first to adopt ITS. Of course, if the customer is Volvo, that would be even sweeter for purposes of revenge. <G>
And now for something completely different. I wonder if Simula has considered entering the auto seating market? The seats are the second most expensive component in a car, and Simula has experience in both rail and airline seating, and now formal relationships with two first tier suppliers. Inflatable restraints integrated into the seat may be another possibility (inflatable headrests, side bolsters, etc).
I regret I didn't get to meet any of the regular posters at the shareholders meeting. I thought about making an SI sign and sitting under it, but didn't have the nerve. Maybe next year.
Lisa |
