AutoMOTIVE 5 - (Page 91)

metaldyne.qxd 24/11/06 12:13 pm Page 91 Stallkamp, the former president of Chrysler Group and now risk, where you never know if the price of gasoline is going a partner with New York investment firm Ripplewood to rise to three or four dollars a gallon, where you don't know Holdings. Ripplewood owns a majority stake in the 90-year- if one of the OEMs will be financially challenged and you old Asahi Tec. We began the process of exploring whether don't know about production ups and downs affecting you, or not this deal would make sense, says Leuliette. It's a very the best way to protect yourself is to increase your liquidity, innovative and involved consolidation. The acquisition has says Leuliette. This deal improves our liquidity, de-levers us been done with what is called a ring-fence finance and makes us more of a predator in the jungle by giving us instruction, which means that Metaldyne, the legal entity, access, not only to the capital markets in Japan, but also to will remain. the significant funds that Ripplewood has earmarked for Leuliette and Asahi Tec chairman, Shoichiro Irimajiri will automotive expansion. It really is a win-win for everybody. each become co-chairman and CEO of the newly-merged On the face of it the acquisition would appear to be a company. The acquisition will increase Asahi Tec's customer good fit for both the participating companies. Asahi Tec has base, geographic footprint and product portfolio, says gained access to the North American market for the first Irimajiri. We will be able to bring new products and services time, but it does not compete in the same product ranges as to market more rapidly and more efficiently, thanks to the Metaldyne, just as the US company, which already has plants increased scale of Metaldyne's operations and a strong and in Korea and China, has not challenged Asahi on its home widely-recognised management team. turf. Tim Leuliette sees other advantages as well. Metaldyne Asahi Tec is primarily in the medium/heavy truck business is a huge user of ductile iron, he points out. We use about and in aluminium wheels. Its business is mainly in Japan and 80,000 to 90,000 tons a year. Asahi is a major producer of Thailand with a subsidiary company in China. It needed the ductile iron and, since we began our negotiations, we have access to technology which Metaldyne can provide. We focused on this particular material. It is not something we equip Asahi Tec with a global platform on which to sell its currently produce ourselves. products, says Leuliette. We bring a global management What Leuliette did not want was to focus on team with expertise in consolidations and growth, and we acquisitions where Metaldyne spent the first two years re- bring a great deal of technology, which is the main reason engineering and re-deploying. A process which effectively we have grown our business with the Asian and North means two lost years when a company should be on the American OEMs. offence. The Asahi Tec deal takes care of the Asian side of From a Metaldyne perspective, the advantage of the deal the business and allows Leuliette to focus on potential is that we can turbo-charge our access to the Asian OEMs, acquisitions in Europe. Three years ago, we opened our he continues. For the most part, their chassis and engine European engineering centre outside Frankfurt, he says. platforms are still designed in Asia. We have to be there with That has been very successful in winning new business engineering support and prototype delivery support. You for us. However, whilst our European business has been can't support Asia by flying a team over on a 747 once every growing quite well, organic growth just doesn't get you two months. They have to be active. We're not selling the there fast enough. The growth may have to come from company and going home. We're selling the company, acquisition. The reason for our European revenue not rolling up our sleeves and up-dating our passports. We're being higher has nothing to do with us not wanting it to going to be very active in doing what we'd like to do with be so. It's just that there are only so many hours in the day this new platform. and we needed to protect our Asian growth, which we The combined company is expecting 45 percent of its have now done. Now we can focus more of our attention a revenue to come from Asia. The acquisition will also bring in on European expansion. fresh equity to Metaldyne and eliminate the company's debt. In a climate where people are concerned about event 91 

Table of Contents for the Digital Edition of AutoMOTIVE 5

Editors Note
News
Here For The Long Haul
Halewood. Rebirth of a Car Plant
Safety First
Focus on Flexibility
A Prophet Without Honour?
Chrysler Cuts It Four Ways
A MINI For All Reasons
Porsche Plans Continuous Logistics Improvement
Flawless, Consistent Execution
Ford's European Supplier Parks Deliver Lean Manufacturing Efficiencies
Cheap and Cheerful
Onwards and Upwards
Schrader and Siemens Electronics Assembly Systems Take the Pressure
No Faults Forward
A Long Way From Wheelbarrows and Bath Tubs
A New Era in US/Japanese Cooperation
A Dialogue of the Deaf

AutoMOTIVE 5

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