V. Johnson Enterprises and Valeo form automotive joint venture

Dustin Walsh

Published: October 29, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions Automotive Injection Molding
Companies & Associations

DETROIT (Oct. 29, 1:25 p.m. ET) — V. Johnson Enterprises LLC, an affiliate of Redford, Mich.-based Piston Group, announced Oct. 29 the formation of a new joint venture with Valeo SA called Detroit Thermal Systems LLC.

Ford Motor Co. orchestrated the deal to create the minority-owned supplier and to transfer its ACH climate control business in Plymouth Township, Mich., to the new joint venture.

To support the new business, DTS announced the leasing of a 365,000-square-foot plant in Romulus, Mich. The plant will support the ACH business, or HVAC (heating, ventilation and air-conditioning) units for Ford vehicles, with 30 injection molding presses. The plant has the capacity to produce 2 million units annually, the company said in a release.

Production will begin during the third quarter of 2013, the company said. Assets and operations will be moved over the next two years. Current ACH employees, many UAW members, will need to reapply for positions at the new DTS plant.

“Our investment in readying this site with the installation of advanced equipment and employee training, demonstrates our commitment to rebuilding a vibrant manufacturing base in the Detroit area,” Kurt Hall, COO of the new company, said in a release. “Once our investments are complete, this facility and our talented workforce will create the benchmark for efficient and high-quality manufacturing of climate control systems.”

V. Johnson Enterprises, led by former Detroit Piston and Chairman and CEO Vinnie Johnson, will maintain a majority stake in the venture. Paris-based Valeo operates in North America as Valeo Automotive Inc. in Troy, Mich.

The deal is reminiscent to the deal that created the Detroit-based minority-owned supplier Detroit Manufacturing Systems LLC.

Ford helped form DMS in May with a deal between Wayne, Mich.-based Rush Group and French supplier Faurecia SA. Under that deal, Ford created the minority-owned supplier — Andra Rush, Detroit Manufacturing Systems CEO, is an American Indian — and unloaded its $1.1 billion book of interiors business at its 1.6 million-square-foot ACH Saline plant.

Rush Group holds a 55 percent stake in that joint venture.

DMS occupies 480,000 square feet in the Gateway Industrial Center in Detroit and shipped its first product, instrument panels for the Ford Mustang, to the automaker’s Flat Rock, Mich., assembly plant July 30.

DMS also is bidding on supply contracts with other automakers, including General Motors Co., Chrysler Group LLC and Toyota Motor Corp.

Valeo has been after the ACH business for nearly five years. It signed a memorandum of understanding to acquire the plant in December 2006, but the deal fell through in 2007 after negotiations with the UAW stalled.

Then-Valeo CEO Thierry Morin told reporters at the 2007 Frankfurt Motor Show that the supplier wanted hourly pay for UAW workers reduced to $20 or less from $30, Wards Auto reported.

Valeo’s North American unit generated sales of $1.9 billion last year with 447 employees in metro Detroit. At the time of the deal signing in 2006, the plant employed 1,250, according to a Ford release.

Piston Group was formed by Johnson in 1995 and supplies suspension assemblies, chassis modules and interiors, with Ford being its largest customer. The supplier generated sales of $473.8 million in 2011 with 226 local employees.


Comments

V. Johnson Enterprises and Valeo form automotive joint venture

Dustin Walsh

Published: October 29, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Eriks NV buys two US polymer companies

April 24, 2015 10:38 am ET

Dutch company Eriks NV is expanding its reach in the North American plastics sector with two acquisitions: Dallas-based Seals and Packings Inc. and...    More

Image

Danish packaging firm Faerch buys UK's Anson as part of growth strategy

April 24, 2015 9:37 am ET

Denmark-based packaging company Faerch Plast A/S has acquired Ely, United Kingdom-based Anson Packaging Ltd., a move the company says “should...    More

Image

Reifenhäuser acquires German spinneret company Enka Tecnica

April 17, 2015 9:31 am ET

Germany-based Reifenhäuser GmbH & Co. KG, a major manufacturer of extrusion equipment, has announced that it is acquiring Enka Tecnica GmbH, a German ...    More

Image

Spain's Grupo Antolin to buy Magna's interiors business

April 16, 2015 12:33 pm ET

Spain's Grupo Antolin has reached an agreement to purchase Canadian auto supply giant Magna International Inc.'s interiors unit in a deal valued at...    More

Image

Madison buys Ferry Industries

April 16, 2015 5:22 pm ET

Ferry Industries, the largest manufacturer of rotational molding machinery, was purchased by Madison Industries, a Chicago holding company that is the...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events