Faurecia announced May 3 that it will acquire the Saline interior components business, which is currently operated by .
Details of the sale have not yet merged, but some of the news today confirms what U Faurecia confirmed that is joining with Rush Group Ltd to form a joint venture called Detroit Manufacturing Systems. It will do injection molding, assembly and sequencing of interior trim components from a new facility in Detroit. The Saline plant will focus in the future on core technologies such as injection molding, skin manufacturing and foaming operations with annual revenues of nearly $400 million — down from the $1.1 billion in annual sales generated by the Saline facility today. Caruso has also said that at least 600 of Saline's 2,300 jobs will be shipped to the Detroit Manufacturing System, which was supported by more than $4 million in tax breaks from the Michigan Economic Development Corporation.
With this acquisition, Faurecia, already the world’s leading supplier of interior systems components, will become North America’s No. 1 interior systems supplier, according to the company.
Faurecia will acquire the Saline business, which generates $1.1 billion annual sales supplying cockpit modules, instrument panels, door panels and center consoles for 12 vehicle programs assembled at eight Ford plants throughout North America. With this acquisition, Faurecia’s objective is to create a new operation that is optimized for efficient production, in line with the Faurecia Excellence System, according to the press release.
In conjunction with the Saline acquisition, Faurecia will enter into a new joint venture with Rush Group Ltd., one of the Rush Group of companies that together comprise one of the largest Native American and woman-owned businesses in North America. The joint venture, called Detroit Manufacturing Systems, will do injection molding, assembly and sequencing of interior trim components from a new facility in Detroit. Rush Group will hold the majority of the capital and the management of DMS, while Faurecia – with 45 percent of the capital – will bring its technology and manufacturing expertise to the joint-venture. As a result, the Saline plant will focus in the future on core technologies such as injection molding, skin manufacturing and foaming operations with annual revenues of nearly $400 million, according to the release.
This deal will have no significant impact on Faurecia’s debt and cash position, according to the release.
With this acquisition, Ford Motor Company will become Faurecia’s third largest customer. Faurecia will thus reinforce its position as part of Ford’s Aligned Business Framework, which it joined in June 2009. ABF companies enter into long-term relationships with Ford to strengthen collaboration and drive mutual profitability and technology development.
The target date for transitioning the Saline operation is June 1, 2012. Operations transitioning to the DMS facility will begin transferring this summer.
“The acquisition reinforces our leadership position in interior systems and our global partnership with Ford Motor Company,” said Yann Delabrière, Chairman and CEO of Faurecia. “The Saline business strategically fits with Faurecia’s key priorities, directly tying to our core focus, continuous improvement in operating performance, global customer expansion, technology leadership and strategic growth plans.”
“We see this acquisition and joint venture providing tremendous opportunities for Faurecia, Ford, employees, local communities and other key stakeholders,” said Mike Heneka, President of Faurecia North America. “As we transform the Saline business and help launch a new plant in Detroit, we will foster a collaborative working environment, strengthen our relationship with Ford and invest in these communities.”
“Our ABF network of suppliers is built on long-term relationships and collaboration for the mutual benefit of Ford and our suppliers,” said Tony Brown, Group Vice President, Ford Global Purchasing. “With this announcement, Faurecia is not only serving a critical business need for Ford – they are helping to provide leadership in our effort to build a financially healthy, diverse supply base.”