Businessweek

Tower International, Inc. manufactures engineered structural metal components and assemblies primarily serving automotive original equipment manufacturers (OEMs). The company offers its automotive customers a product portfolio, supplying body-structure stampings, frame and other chassis structures, as well as complex welded assemblies, for small and large cars, crossovers, pickups and sport utility vehicles (SUVs). Products Body structures and assemblies: Body structures and assemblies form the basic upper body structure of the vehicle and include structural metal components such as body pillars, roof rails and side sills. This category also includes Class A surfaces and assemblies, which are the ‘exterior skin’ of the vehicle — body sides, hoods, doors, fenders and pickup truck boxes. These components form the appearance of the vehicle, calling for surface finishes. Chassis, lower vehicle structures and suspension components: Lower vehicle frames and structures include chassis structures that make up the ‘skeleton’ of a vehicle and which are critical to overall performance, particularly in the areas of noise, vibration and harshness, handling and crash management. These products include pickup truck and SUV full frames, automotive engine and rear suspension cradles, floor pan components, and cross members that form the basic lower body structure of the vehicle. The company manufactures a variety of stamped, formed and welded suspension components, including control arms, suspension links, track bars, spring and shock towers, shackles, twist axles, radius arms, stabilizer bars, trailing axles and brackets. Complex body-in-white assemblies: Complex body-in-white assemblies comprise multiple components and sub-assemblies welded to form major portions of the vehicle’s body structure. The company refers to body-in-whites as the manufacturing stage in which the vehicle body sheet metal has been assembled or designed but before the components and trim have been added. Complex assemblies include front and rear floor pan assemblies and door/pillar assemblies. Other: The company also manufactures various other automotive products and defense and aerospace products. Strategy The company seeks to execute a business model that generates sustainable ongoing free cash flow, providing flexibility for capital allocation; to reduce debt leverage and interest cost; to achieve growth at or above industry through strong competitive capabilities in engineering, manufacturing, and program management that contribute to positions in cost and quality, plus opportunistic, accretive acquisitions and entering new growth markets; and to manage risk through financial discipline and customer and geographic diversification. Seasonality The company’s customers in Europe shut down vehicle production during portions of July or August and during one week in December. The company’s North American customers shut down vehicle production for approximately two weeks during July and for one week during December. The company’s customers in Brazil and China shut down vehicle production during certain periods in its first quarter. The company’s quarterly results of operations, cash flows and liquidity may be impacted by these seasonal practices. Joint Ventures As of December 31, 2012, the company had four consolidated joint ventures in China: Tower Automotive (WuHu) Company, Ltd.; Changchun Tower Golden Ring Automotive Products Co., Ltd.; (Xiangtan) DIT Automotive Products Co., Ltd.; and Tower (Ningbo) DIT Automotive Products Co., Ltd. Competition The company’s major competitors include Magna International, Inc. (Cosma division), Gestamp Automocion, Martinrea International, Gruppo Magnetto, and Benteler Automotive. History Tower International, Inc. was founded in 1993.