Automotive spin cycle

Even with cutting-edge technology at their disposal, automakers and parts suppliers can’t seem to shake the image investors have of them as old and rusty.

Parts makers Autoliv and

Delphi may have found an answer. Both are planning spinoffs of electronics businesses into new companies positioned for the future, while leaving profitable but old-line manufacturing behind.

Morgan Stanley analyst Adam

Jonas predicts similar moves in the industry and says they’re essential to attract investors and employee talent. Such spinoffs would “help isolate and cleanse the most attractive parts of the supplier portfolio,” he wrote in an investor note.

A tech company might be interested in joining with Autoliv’s active safety company that makes radar, night vision and electronic braking systems. But it may be fearful of liability from the company’s older products such as air bags.

Automakers may also create separate divisions or spinoffs of technology businesses. For instance, in February, Ford bought a majority stake in a Pittsburgh artificial intelligence firm but is running it as a startup company.

But the industry has a limited time window to realign its businesses while sales and profits are at or near cyclical highs, Jonas wrote.