Southfield, MI, March 9, 2006--Lear Corp., a supplier electronics, seating and flooring to the automotive market, said it widened its 2005 loss by $6 million, the result of price disputes.
The company said after it reported its earnings Jan. 25, that the customer told the company that it was making retroactive pricing adjustments for shipments made before 2006 for a vehicle line that is no longer in production. The customer withheld payments due in 2006, Lear said.
Lear isn't naming the customer at this time, spokeswoman Andrea Puchalsky said. Lear disagrees with the pricing adjustment, and the two parties are in talks. Puchalsky said Lear believes the pricing agreements were closed, and the customer may have made some calculation errors.
The adjustment reduces fourth-quarter and 2005 sales by $6 million, increases the net loss by $6 million and widens the per-share loss by $0.09 for the quarter and year. Lear originally reported January fourth-quarter sales of $4.4 billion and a net loss of $596 million, or $8.88 per share.
Lear supplies electronics, seating, flooring and other products to automakers, including General Motors Corp., Toyota Motor Co., and BMW AG.
This is Lear's second major pricing dispute in the last six months. Late last year, Lear threatened to stop shipping parts to DaimlerChrysler AG unless DaimlerChrysler paid more because of the rising cost of raw materials. DaimlerChrysler sued Lear, and the two companies agreed to an out-of-court settlement in January. Terms of that deal weren't disclosed.
