Strattec sales, earnings fall in quarter

Fiat Chrysler decrease cited

Strattec Security Corp. said Thursday sales fell 3.5% in its fiscal second quarter, with the decline linked to lower sales to its largest customer, Fiat Chrysler.

Earnings in the quarter declined to $398,000, or 11 cents a share, from $3.4 million, or 93 cents, in the same period last year, the Glendale automotive parts supplier said.

Total sales fell to $98.9 million from $102.5 million last year. Sales to Fiat Chrysler fell by $9 million in the quarter, to $22.5 million, with the decline linked to the phaseout of the Chrysler 200 model and low volumes for the new Pacifica minivan.

That decline was offset by gains in sales to General Motors Co. and several other customers that buy newer products made by Strattec, such as latches, fobs and driver controls.

Strattec has been diversifying by adding these product lines to shift away from a business model focused primarily on production and assembly of locks and keys.

The company said earnings were affected by lower payments from customers, spending on efforts to improve the quality of its manufacturing processes as well as start-up costs for its factory in Leon, Mexico.

“After winning record amounts of new business last fiscal year, we are faced with additional costs in executing new programs which have a negative impact now, but should create positive results when those programs go into production,” Frank Krejci, Strattec’s president and chief executive, said in a statement.