IAC forms JV with Reyes to supply Toyota with interior trim, help OEM meet supplier diversification goals

International Automotive Components (IAC) Group and Reyes Holdings LLP have formed a joint venture to supply injection and blowmolded interior trim components and sequence and assembly services for the Toyota Tundra and Tacoma built at Toyota Motor Manufacturing Texas Inc. (TMMTX). Reyes Automotive Group II (RAG II) is based in San Antonio, TX and will apply for Minority Business Enterprise (MBE) certification, with Reyes holding 51% ownership and IAC having a 49% stake.

The 90,000-sq-ft joint-venture facility has nearly 200 employees and represents IAC's first plant in Texas, and third manufacturing operation launched in the past year, including facilities in Anniston, AL and Belvidere, IL. IAC says this reflects its commitment to developing partnerships with diverse suppliers and a continued investment in its core competency, automotive interiors.

Toyota Tundra interior trim

IAC, with 2010 sales of $3.7 billion, operates 75 manufacturing facilities in 16 countries, while employing approximately 22,000 people around the world. Toyota broke ground on its TMMTX site in October 2003, building a 2 million sq ft assembly plant on a 2000-acre site in San Antonio. Employees there total 1694 with investment to date of $1.5 billion. Fernando Reyes, president and owner of Reyes Industries Inc., runs a number of manufacturing businesses supplying the military as well as the automotive industry.

Seeking more minority suppliers

Toyota, and the broader automotive industry, have emphasized increasing business with minority and women controlled businesses. On its website, the company said, "We are always looking for creative ways to involve more ethnic Minority and Women Business Enterprises (MWBE) in our company...in order to contribute to the economic well-being of all segments of our communities, Toyota is committed to having a supplier base that more closely reflects the diversity of our customers and our team members."

Reyes Holdings' companies have benefitted from this push to source from minority owned businesses. Starting in 2004, Reyes Automotive Group joined with Lear Corp. and Am-Tex Corp. to supply trim components for the Toyota Tundra. Lear announced in December 2004 that it was awarded interior trim business for the 2007 Toyota Tundra pickup truck and had plans to form a MBE joint venture with Reyes Automotive Group. Prior to that, Lear supplied seats to Toyota through its Total Interior Systems - America joint venture with Toyota Boshoku, as well as carpet products through its Amtex joint venture with Hayashi Telempu.

Ford exceeded its 2010 supplier diversity sourcing goals, purchasing $4.1 billion in goods and services from its tier-one minority- and women-owned business enterprises. This surpassed Ford's annual goal of sourcing by more than 10% of its U.S. production and non-production business with diverse suppliers. That figure was up from $2.7 billion, and besides its direct business dealings, Ford's tier one suppliers spent $1.29 billion with tier two minority- and women-owned businesses in 2010, an increase from $1.02 billion in 2009.

The U.S. government's Minority Business Development Agency (MBDA) had its fiscal year 2012 budget expanded by President Obama, with his proposal requesting $32.3 million for MBDA to expand its services and assistance to the nation's 5.8 million minority businesses. That level of funding represented an increase of $822,000 over FY 2010 appropriations. The MBDA currently funds more than 45 minority business centers in 26 states, the District of Columbia and Puerto Rico. The additional funding in the FY 2012 budget would allow MBDA to open two additional minority business centers.