Lear opens electronics plant

SHANGHAI  -- Lear Corp. has opened its first electronic products plant in China. The plant is part of a strategy to make electrical and electronic products account of half of Lear's sales in China.

 "For (automaker) purchasing people, the biggest worry is risk," says Chris Obey, president of Lear's Asia operations. "We go to every customer and talk about electronics, (then) we bring them here and show them what we can do."

Lear, of Southfield, Michigan, produces automotive seat systems and electrical and electronic products such as wire harnesses, printed circuit boards, and tire pressure monitoring systems.

Seats currently account for around 95 percent of Lear's business in China compared to 70 percent worldwide, says Obey.

But Lear sees "a huge opportunity" in China to grow its electronics business, Lear CEO Bob Rossiter said in April at the Beijing auto show.  The aim is to make seats account for half of Lear's China business, and electrical and electronic products the other half.

The new plant is a wholly owned Lear subsidiary called Lear Electronic and Electrical Products Shanghai Co. Ltd. It consists of two lines to make printed circuit boards.

Each line cost more than $1 million (7.0 million yuan), says Raymond Lu, the plant general manager.

Soon, the plant will add a line to make tire pressure monitoring systems, he says. Then, Lear will shift some monitoring systems production from the U.S. to Shanghai, says Lu. Circuit boards are small and flat, making them ideal for shipping long distances.

"We considered Mexico, but the supply chain is in Asia," he says. Lear buys machinery, tooling, and components in Asia, says Lu.

Lear already has enough work to fully utilize the plant by the middle of 2009, says Lu.

The plant and lab are part of a large new Lear campus that just opened here. The campus also includes the headquarters of Lear's Asia Pacific and China operations, a seat research lab, and an electrical and electronic products research lab.

Lear employs 140 seat engineers and 130 electrical engineers in Shanghai.

Says Obey:  "We can't get business unless we invest in engineering."