By Kevin Krolicki
NEW YORK (Reuters) - Diversified manufacturer SPX Corp. (SPW.N: Quote, Profile, Research, Stock Buzz) is open to an eventual sale of its low-margin auto parts unit even as it invests in its faster-growing auto service business targeting dealer networks, the company's chief executive said on Monday.
SPX has niche operations supplying aluminum die-cast components and filters to automakers, an industry that has faced declining margins and intense pressure to shed costs, particularly in North America.
"That business is about the only part of our portfolio that is not experiencing moderate to strong growth," SPX President and Chief Executive Chris Kearney said at the Reuters Manufacturing and Transportation Summit in New York.
Kearney said SPX had outperformed the distressed auto parts sector and makes a "high single-digit return" on its component business because of a management focus on containing costs.
But he said the Charlotte, North Carolina,-based company was open to an eventual sale of its auto parts supply operations, which represent less than 10 percent of sales.
Under Kearney, who took over as CEO in 2004, SPX has focused on shedding assets outside its major manufacturing areas to fund a a reduction in debt and a share buyback program.
"It's not a strategic fit," Kearney said of the SPX auto component business. "It is a business that we have not characterized as core to the company's growth."
He added: "We're certainly in no hurry to do anything, but opportunistically we will look to move some of those assets over time because they are not core to the strategic growth of the company." Continued...
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