Toyota pedal maker says making redesigned pedals

[FarCenter]

http://finance.yahoo.com/news/Toyota-pedal-maker-says-apf-395647835.html?x=0&sec=topStories&pos=3&asset=&ccode=

Toyota gas pedal makers says it is ramping up production of replacement pedals for new cars

WASHINGTON (AP) -- The company that makes the gas pedal systems implicated in Toyota's big recall says it is working with the automaker on a fix.

CTS Corp. officials say they have ramped up production at three factories to manufacture redesigned pedals. The pedals are meant to solve problems with condensation that Toyota has said can cause them to react slowly when a driver presses on the gas. In rare cases, the gas pedals can get stuck.

CTS says it is also working with the Japanese automaker to find a potentially quicker repair for vehicles already on the road.

Toyota spokesman Brian Lyons says the automaker has not decided if the new pedals will go to dealers or factories.

He says the company has also not decided whether it will repair the defective pedals or replace them. Toyota engineers are working on ways to fix the pedals, he said.

<SNIP>

[napi21]

1. I bet CTS is out of business withing the year! I know if I ran

Toyota, I'd sure sue them for my losses, and with suspension of sales, stopping delivery of those cars already purchased but not deliverede, and dealing with all the recalls, that # is going to be astronomical!

[FarCenter]

2. It all depends on what is in the indemnity clauses of the supply contract

CTS claim that Toyota is only 3% of their sales. Their biggest customer is Hewlett Packard. They are primarily an electronics equipment outsourced manufacture and supplier of various sensors and part to the electronics industry.

There has been significant volume in the stock the last couple of days.

http://finance.yahoo.com/echarts?s=CTS#chart2:symbol=cts;range=5d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

[JuniperLea]

4. Can you point me to where they mention Hewlett Packard?

I'm not finding it, but know someone who will find this information interesting.

[FarCenter]

6. Their Annual Report

http://www.ctscorp.com/investor_relations/annual_report/annualrep2008.pdf

Our 15 largest customers represented 53%, 59%, and 61% of net sales in 2008, 2007, and 2006, respectively. Sales to Hewlett-
Packard Company amounted to 11% of net sales in 2008, 17% of net sales in 2007, and 22% of net sales in 2006.
EMS segment revenues from Hewlett-Packard Company represented $76.8 million, or 19%, $117.2 million, or 29%, and
$143.2 million, or 37%, of the segment’s sales in 2008, 2007, and 2006, respectively.

The Company continues to broaden its customer base. Changes in the level of our customers’ orders have, in the past, had a
significant impact on our operating results. If a major customer reduces the amount of business it does with us, or substantially
changes the terms of that business, there could be an adverse impact on our operating results.

Additionally, we expect to continue to depend on sales to our major customers. Because our customers are under no obligation
to continue to do business with us on a long-term basis, there is always the possibility that one or more customers may choose
to work with a competitor and reduce their business with us. Customers may also reduce or delay their business with us
because of economic or other conditions or decisions that reduce their need for our products or services. Since it is difficult to
replace lost business on a timely basis, it is likely that our operating results would be adversely affected if one or more of our
major customers were to cancel, delay, or reduce a large amount of business with us in the future. If one or more of our
customers were to become insolvent or otherwise unable to pay for our products and/or services, our operating results,
financial condition, and cash flows could be adversely affected.

Also

Because we currently derive a significant portion of our revenues from a small number of customers, any decrease in orders
from these customers could have an adverse effect on our business, financial condition and operating results.
We depend on a small number of customers for a large portion of our business, and changes in the level of our customers’
orders have, in the past, had a significant impact on our results of operations. Our 15 largest customers represent a substantial
portion of our sales, approximately 53% of net sales in 2008, 59% of net sales in 2007, and 61% of net sales in 2006. Our largest
customer is Hewlett-Packard Company, which represented approximately 11% of our net sales in 2008. If a major customer
significantly cancels, delays or reduces the amount of business it does with us, there could be an adverse effect on our
business, financial condition and operating results. Such an adverse effect would likely be material if one of our largest
customers significantly reduces its amount of business. Significant pricing and margin pressures exerted by a key customer
could also materially adversely affect our operating results. In addition, we generate significant accounts receivable from sales
to our major customers. If one or more of our largest customers were to become insolvent or otherwise unable to pay or were

[JuniperLea]

7. Perfect!

Thanks!

[JuniperLea]

9. Was that second bit in an article?

Sorry I'm dense today... a lot on the table, but this could be important.

[FarCenter]

10. Both excerpts were from their annual report

The annual report is some pages of fluff, followed by their 10K.

The first excerpt was from page 3 of the 10K, which is also page 16 of the pdf file.

The second was from page 7 of the 10K, which is also page 19 of the pdf file.

Do a find on Hewlett in Adobe Reader.

[JuniperLea]

12. Many, many thanks!

This is very helpful.

[FarCenter]

3. Actually CTS is saying they won't be affected

UPDATE 2-Supplier says fixes faulty Toyota pedal

http://www.reuters.com/article/idCNN2819870520100128?rpc=44

<SNIP>
"Step one is that we have a new design," CTS Corp (CTS.N)
Chief Executive Vinod Khilnani said. "That new design has been,
I believe, tested adequately by CTS and Toyota and has been
agreed as the solution." Khilnani said his company had built the earlier accelerator
pedals to Toyota's initial specifications and that problems
reported with the pedal sticking appeared to be linked to
condensation around the part which the automaker had not
anticipated. "We built the pedal to their specifications and Toyota has
concurred with that," Khilnani said on a conference call with
analysts to discuss the company's financial results.
<SNIP>
Khilnani said Toyota representatives were in CTS factories
to work out a way to "ramp up production as rapidly as possible
so that they can get replacement pedals very, very quickly." He did not expect that the ongoing recall would have a
negative impact on financial results for CTS. "When the dust settles and people absorb all the news, this
will not have any significant financial impact on the
corporation," Khilnani said. The new accelerator pedals CTS is building for Toyota will
address the condensation problem that causes the pedal to
return slowly to the idle position, he said. CTS is producing redesigned pedals for Toyota at three
existing factories and is in the process of adding a production
line, he said.

[buzzard]

5. From what I understand they were made to Toyota's specification and Toyota would have

tested them presumably. I think the problem was a design flaw not a manufacturing one.

[Gman2]

8. Couldnt happen to a nicer company. Toyota are shitheels.

When you agree to do work for them, they pay AS the vehicles sell. You must put out huge cash. Then, if they dont like the design, or they find a small veering, not harmful, of the item from blueprint, they wont pay EVER. Many people have gone bankrupt waiting for Toyota to pay. Their captive MFG's here are slavelords. Pay is down. In other words, they do as they please.

[deaniac21]

11. I'm not buying any car you have to pedal.