Asian suppliers are following their customers and moving into Eastern Europe at a rapid pace as well. South Korea's Hankook Tire, searching for the ideal site for its first plant on European soil, just announced a decision to build in a suburb of Budapest, Hungary. The company, which sends the largest percentage of its exports to European markets, realized that it needed to be closer to this large – and growing – customer base, to reduce manufacturing and logistics costs. After considering locations in several Central European countries including Slovakia and the Czech Republic, the firm, a major Kia supplier, found what it was looking for in Hungary – reasonable logistics and production costs, skilled workers, accessibility to Western Europe and a government eager for the investment.
   Other suppliers are working hard to reduce their dependence on a single large customer, and they are hoping that European expansion will help them do it. In the aftermath of Delphi's bankruptcy, firms are drawing lessons from the GM supplier's spectacular rise and fall – and trying not to replicate it.
   Take Visteon. What Delphi was to GM, Visteon was to Ford. The supplier, still reeling from steep Ford production cuts that contributed to a reported $3.28 billion loss over the last four years, appears to be on the rebound. After transferring ownership of unprofitable domestic facilities back to Ford, a leaner Visteon is looking more aggressively for opportunities with a diversified customer base across the Atlantic. The firm snagged some major contracts through its Korean affiliate Halla with Kia in Slovakia and Hyundai in Turkey. The new, just-in-time factory in Slovakia will deliver climate control components for cars destined for the European market. Production is slated to begin in December 2006. Visteon's facility in Turkey has already started producing HVAC systems and engine cooling modules for the Hyundai Accent rolling assembly lines in Izmit.
   Company executives say that their location strategy is based on what their customers want. "Visteon's first objective is to effectively support its customers. Since Visteon won business to supply Hyundai's Izmit manufacturing plant in Turkey, the most efficient and competitive solution was to set up a plant in Turkey in near proximity to the customer's assembly lines," says Thorsten Bloemer, Visteon's director for business strategy and planning.
   Future expansion will depend on customer needs. "We will continue to build our capabilities in China, India and Eastern Europe," Bloemer says.
   Then there is Toronto-based Magna International, a diversified supplier that designs, develops and manufactures high-end systems and assemblies, primarily for Mercedes-Benz. The company, which also puts together complete Mercedes G-Class cars at Magna Steyr in Graz, has just announced the expansion of this facility, for new customers Jeep and Chrysler.
   "We are working on broadening our customer base," says Daniel Witzani, Magna's director of corporate communications. "In addition to adding new orders from within the Daimler-Chrysler family, we are trying to expand with French and Asian automotive companies."
   However, like many suppliers, Magna's efforts to diversify must tread a fine line, as the company tries to keep existing customers happy. "In a nutshell, we are trying to improve our relationship with existing customers – building on our reputation for quality while trying to reduce prices – even as we attract new ones."
   The expanded 8.6-million-sq.-ft. (800,000-sq.-m.) facility in Graz employs 9,800 and features two paint shops, four manufacturing shops, a prototyping shop, an engineering center and a test track. Production of the Jeep Commander started in January 2006.