The ratings on Livonia, Mich.-based TRW Automotive Inc. reflect the company's aggressive financial risk profile, characterized by heavy debt, and weak business risk profile as a global manufacturer of original equipment (OE) auto parts for light vehicles. TRW designs and manufactures active and passive safety-related products. The company had $3.2 billion in total balance sheet debt outstanding as of Sept. 26, 2008. TRW's weak business risk profile reflects the highly competitive nature of the global automotive markets, volatile raw material costs, and the company's almost complete reliance on light-vehicle sales. Somewhat offsetting these negative factors are TRW's diverse geographic exposure, product platforms, and customers, which help reduce earnings and cash flow volatility. Nearly 70% of its sales come from outside
