V. Johnson Enterprises and Valeo form automotive joint venture

Dustin Walsh

Published: October 29, 2012 6:00 am ET

Related to this story

Topics Automotive, Mergers & Acquisitions, Injection Molding

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

Unipex Group buys Ferguson Chemical Innovation

July 29, 2014 1:57 pm ET

Chemical distributor Unipex Group Inc. announced July 29 that it had purchased Ferguson Chemical Innovation, a Brampton, Ontario-based supplier of...    More

Image

Magna expanding interiors site in Slovakia

July 29, 2014 1:47 pm ET

Magna International Inc. plans to nearly double the size of its manufacturing facility in Trnava, in western Slovakia, to accommodate new automotive...    More

Image

Universal Polymer beefing up capabilities through acquisition

July 29, 2014 12:04 pm ET

Universal Polymer & Rubber Ltd. is growing again and adding to its capabilities, this time via another acquisition and a plant expansion.    More

Image

Reynolds considering sale of Closure Systems International unit

July 29, 2014 10:32 am ET

Packaging giant Reynolds Group Holdings Ltd. has put its closures business under review.    More

Image

Carbon black supplier Orion begins trading on NYSE

July 29, 2014 11:29 am ET

Orion Engineered Carbons S.a.r.l. has priced the initial public offering of 19.5 million common shares at a price to the public of $18 per share.    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events