Automotive News - January 7, 2008 - (Page 26a)

JANUARY 7, 2008 • 26A Expanding Meridian sees bright future Rhoda Miel rmiel@crain.com DETROIT — Meridian Automotive Systems Inc. has made it through a tough year in the auto industry, and although conditions look even bleaker for 2008, it is expanding. Meridian will open a plant in Hermosillo, Mexico, by October to injection-mold bolsters for Ford Motor Co. The company also will open a factory in Saltillo, Mexico, by early 2009 to mold thermoset composites for commercial trucks. In addition, Meridian has leased another 20,000 square feet in the suburban Detroit building that houses its 30,000-square-foot headquarters to create room for more engineers, which it expects to need for future business. It also launched a line to chrome-plate bumper fascia and plastic trim parts at its Ionia, Mich., plant. Year of struggle “This is a difficult industry,” President Richard Newsted said during a recent interview at Meridian’s headquarters. “Production was down this year. Some of the forecasts say that production in 2008 may be at its lowest level since 1995. But for all practical purposes, we’ve accom- plished all that we wanted to for this year.” Meridian emerged from Chapter 11 protection at the end of 2006, eager to win contracts and re-establish customers’ and suppliers’ confidence. It struggled as the commercial and heavy-truck business, a major customer, cut production 15 percent. Resin prices continued to climb, squeezing Meridian and every other plastic molder. Meridian closed plants in Jackson, Ohio, and Grand Rapids, Mich., to consolidate production. Newsted would not provide precise information about the privately held company’s finances, or discuss how much Meridian will spend on its new plants in Mexico. But he said the company expects to approach $700,000 in sales for 2007, compared with a little more than $800,000 for 2006. What is important, he said, is that the company is profitable. Good prospects Meridian has more business coming in, including the work to fill the two new plants in Mexico, and has had a positive response to the chrome-plated plastic used in the grilles for the Ford Expedition and Lincoln Navigator SUVs. The molder also is eager to com- plete negotiations for its proposed purchase of the Automotive Components Holdings LLC lighting plant in Sandusky, Ohio, from Ford. The plant makes headlamps and other lighting for 60 percent of Ford’s vehicles. The companies announced the planned acquisition in June, but discussions were put on hold until Ford completed negotiations with the UAW on its new labor contract. Newsted said the future looks good, even if the industry’s conditions seem harsh. He added: “We’re creating a much more stable environment.” c The electric motors used on the Lincoln MKX’s window regulators now will be supplied by Brose. Brose bought the former Siemens VDO business last month from new owner Continental. Brose buys Siemens motor unit as step toward N.A. growth April Wortham awortham@crain.com Germany’s Brose Group hopes to use the first spoils from Continental AG’s takeover of Siemens VDO Automotive AG to propel its own growth spurt in North America. On Dec. 20, Brose agreed to purchase the electric motor operations of the former Siemens VDO from new owner Continental. Terms were not disclosed. The transaction is subject to approval from antitrust authorities. Included in the sale is the former Siemens VDO’s electric motor business for window regulators, antilock brake systems, heating and ventilation systems, engine cooling and electric power steering. The sale also includes Continental’s cooling-fan business, which belonged to Continental before its $16.71 billion acquisition of Siemens VDO on Dec. 4. Privately held Brose manufactures window regulators, door systems and seat adjusters. In a statement, Continental Chairman Manfred Wennemer said Siemens VDO had considered selling the electric motors unit before closing the deal with Continental. “We resumed those considerations and brought them to a close,” Wennemer said. “Moreover, we’re keeping to our promise of making decisions as quickly as possible during the phase of integrating the former Siemens VDO units so as to eliminate any uncertainties.” Cost-efficient move The electric motor unit employs about 4,200 worldwide. In 2007, it had sales of 740 million euros or about $1.07 billion at current exchange rates. About 30 percent of those sales were in North America. Customers included BMW AG’s factory in Spartanburg, S.C.; Volkswagen de Mexico; TRW Automotive Inc.; and Visteon Corp. As the world’s largest buyer of automotive electric motors, Brose was also a major customer of the electric motor unit, said Jan Kowal, president of Brose North America Inc. It even may have been the biggest. Between 20 and 30 percent of Brose’s electric motors in North America came from the former Siemens VDO, now Continental, Kowal said. He said it’s too early to say how much Brose will save by producing at least some of its electric motors inhouse rather than buying them from Continental. “The calculation for the acquisition is really based on future expectations of becoming more cost-efficient, but that doesn’t mean we don’t have synergies,” he told Automotive News. “This does open a couple of new product areas where we think we can contribute: heating and cooling, engine cooling and power steering.” Brose expects North American sales to the automakers of about $500 million in 2007. Add about $300 million with the electric motor business, and Brose could jump from the No. 93 spot on Automotive News’ list of the top 150 North American suppliers to No. 60. Kowal said more growth is yet to come. Brose recently booked business that should push sales up an additional 50 percent from 2007 levels over the next two to three years, he said. More acquisitions? As a group, Brose is targeting global sales of $4.19 billion by 2010. Twothirds of that growth will be outside Europe, predominantly in North America and Asia. Since coming here 15 years ago, most of Brose’s growth in North America has been organic. Kowal hinted that could change, although he declined to say how much Brose has set aside for acquisitions. “If we wanted to, we could continue” buying companies and divisions, Kowal said. “It is more the question of doing it the right way and integrating the business. Brose is very cautious in making these steps, but nothing is impossible.” c http://www.fanucrobotics.com http://www.fanucrobotics.com

Table of Contents Feed for the Digital Edition of Automotive News - January 7, 2008

Caddy V-8 is endangered species An industry turns green -- let's talk JAPAN TRIUMPHANT Ford, Microsoft to offer 911 service in Sync GPS will track fuel price Brose buys Siemens motor unit as step toward N.A. growth Expanding Meridian sees bright future Federal-Mogul CEO to stay Harbour Consulting sold Soft market threatens Tundra sales goal Ford dumps volume targets for dealer bonuses How HCCI engines work Visteon: 'We're leaner and smaller' Ford doubles regional promo money Gasoline-diesel combo moves closer to reality Rethinking retail: A hot topic at World Congress Denso expands hybrid plant CAFE fines may yield meager grants Some pay raise: To $8.3 million from $1 New Chrysler purchasing chief looks to Asia BMW adds jobs to boost S.C. output Continental layoffs follow production cuts at Chrysler Study: Indirect loan delinquencies soar No more peekaboo for Camaro Saturn's Lajdziak: GM is 'where I wanted to be' LETTER TO THE EDITOR Why buy Japanese? Here's an answer CAFE will put new entrees on auto show menu What an exciting way to start 2008 LETTER TO THE EDITOR 84-month financing is nothing new LETTER TO THE EDITOR GM ad policy shift is good for dealers JAMES B. TREECE Detroit show gets back on a global track LETTER TO THE EDITOR Too many dealers: Blame greed LETTER TO THE EDITOR Why not learn from Toyota? LETTER TO THE EDITOR A hot news item? Nah; it's 9 years old Suppliers to the 2008 Saturn Vue Supplier personnel Haldex farms out brake work The theme: Green and mean Dodge Ram gets interior upgrade BMW's 1-series coupe gets a soft-top counterpart Chrysler eye candy includes green jelly bean Chinese automakers increase their presence Concept offers a peek at Explorer's likely successor Ford goes global in styling its B-cars Forum concept is a clubhouse on wheels Dealers Simple safety: Green, amber, red Lexus SUV luxury will grow on you Personnel Gas prices boost Nissan car sales as trucks tank This year's U.S. sales forecast: Gloomy Ford: Tata is lead bidder for 2 brands Ex-Toyota manager goes to Audi Hyundai has new N.A. chief TRW buys Delphi brake assets Who's No. 1? Time for an official review Waning interest Solstice outguns Miata - again Once more into the legal fray? Lifan is the latest Chinese wannabe Things are looking up (and down) for MG Who has 1st Mustang - and what's it worth?

Automotive News - January 7, 2008

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