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Harman International Industries, Incorporated Message Board

  • journeyman1865 journeyman1865 Sep 2, 2012 9:11 PM Flag

    Company Long Term Outlook

    This is a Tier 1 Automotive Supplier with a product with proprietary design features.
    They are a "Sound Company" with many product lines and markets but the heavy sales side of the business is automotive.
    Best part of company outlook is that booked orders exceed 3 years sales.
    Right moves in last 5 years:
    adding to design and assembly capability in low cost geographies;
    pushing platforms that can be leveraged amongst multiple vehicles;
    assembling products on the continent that consumes them;
    creating more consumer products with good marketing to improve pathway to sell automotive upgrades.

    Consumer products must be well designed and made to make branded upgrades desirable;
    Direct paying customers are automotive;
    Unlike Apple customers, they are intolerant of delivery and quality misses and there are severe penalties. These range from daily fees per vehicle for a yard hold, line down fees of $1,000's/minute to loss of a contract. The effort to avoid this can appear as extraordinary costs in logistics and in factory operations. Part of last years good numbers was a competitor unable to deliver product for months due to the earthquake in Japan.

    Company now operates on 4 continents, building the same products on 2 to 4 of them simultaneously. The process is not yet rock solid but the customers expectations are.

    The human capital in the high cost geographies feel threatened. They could leave for competitors. These teams are extraordinarily expensive to recruit and train in the the products particulars. Low cost geographies take time to acquire the product knowledge and experience.

    There is more work than there is factory capacity in the near future. Ramping up new factories is expensive. Apple has a large crack team in place to drive their EMS suppliers. Harman has not prepared for this level of critical volume purchasing.

    Sentiment: Hold

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    • Very well stated. Add to plus side some of the best brand names in the World....JBL, Crown (pro), Lexicon, Mark Levinson, Digitech (pro-guitar processing), Revel, Soundcraft (pro-soundboards) AKG (microphones), Harman Kardon, etc...Studer, Infinity, Becker....add to the minus a major loss of great talent Matt Munn key employee for Motive OEM now at Garmin OEM, Rob Urry President of Harman Salt Lake brands....Digitech, #$%$, dbx, Lexicon pro plus handled Crown and much more he was the technology brains behind everything the last 26 plus years...also JBL pro Mike McDonald is now gone too....short term I GUESS it a buy longer term it a disaster the current CEO has too big of an ego to realize he needs to keep his A players it might unravel...then again he could always flip the company before then!

      Sentiment: Hold

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