Tarxien Corp. has exited thermosetauto parts molding with the March 14 sale of its Cobourg, Ontario, plant and equipment to Budd Co. Tarxien, based in Ajax, Ontario, wanted to be a supplier of thermoset and thermoplastic parts but could not land enough contracts to make exterior auto parts from sheet molding compound to justify maintaining the Cobourg operation, according to spokesman Jim Thomson.
The firm will continue to injectionmold and paint thermoplastic autoparts.
``There was a short-term problem of not enough [SMC] business for the capacity,'' Thomson said in a telephone interview.
Budd acquired 10 SMC compression presses, six thermoset injection molding presses, an SMC compounding line, a paint primer line and other equipment in a 140,000-square-foot plant employing about 200. Officials did not disclose terms of the deal, which was announced separately by both firms.
Cobourg is Budd's fourth SMC molding plant, complementing facilities in Carey and North Baltimore, Ohio, and Kendallville, Ind. It also operates a raw materials plant in Van Wert, Ohio. Budd said the Cobourg purchase should have no effect on the 1,300 employees at its other SMC plants.
Siegfried Buschmann, Budd's chairman and chief executive, said in a news release that the acquired SMC and thermoset injection molding capacity boosts its flexibility and capability as a Tier 1 supplier. Spokesman Paul Sichert said he did not know whether Budd plans to make changes at Cobourg.
Cobourg's main customer is General Motors Corp., Thomson said. GM plans to use about 123,000 SMC parts, for spoilers, in 1995, according to estimates by the SMC Automotive Alliance of Southfield, Mich.
Cobourg was unable to secure contracts with other original equipment manufacturers that are heavier users of SMC, Thomson said. Ford Motor Co. plans to use about 1.5 million SMC parts in 1995 for hoods, vents, covers and other applications, the alliance said. Chrysler plans to use 730,000 SMC parts.
Sichert said in a telephone interview from Budd's headquarters in Troy, Mich., that Budd supplies SMC parts to all of Detroit's Big Three.
Tarxien's Complax Components Corp., a wholly ownedsubsidiary, operated the Cobourg plant and for now, at least, has no assets, he said.
Cobourg accounted for about a third of Tarxien's sales, which totaled C$64.1 million (US$45.5 million) last year. Thomson estimated its fraction of Tarxien's sales would have been less this year, partly because Tarxien will begin new thermoplastic molding contracts worth about C$24 million (US$17 million) per year in summer.
Tarxien completed injection molding expansions at its Ajax and Concord, Ontario, facilities last year. Thomson said his firm plans to expand its thermoplastic business through alliances or acquisitions and is reviewing three such opportunities now.
Tarxien started talking with Budd last summer to try to form a partnership to boost Cobourg's business, Thomson said.
``As part of a large automotive parts supplier, the future of the Cobourg plant - and the employees - is much more secure,'' Tarxien President Ralph Zarboni said in a news release.
Complax Corp. planned to close the Cobourg plant in 1992 and move production to Windsor. It reversed the decision when Cobourg workers accepted wage cuts and GM extended an SMC grille contract.
Complax shut its Windsor SMC plant instead and moved production to Cobourg. Tarxien bought the Cobourg operation from Complax Corp. and renamed it Complax Components Corp.
Budd will operate the Cobourg plant as Budd Plastics Ltd., a subsidiary of Budd Canada Holdings Inc. Its major Canadian operation is Budd Canada Inc., a majority-controlled subsidiary that produces auto frames in Kitchener, Ontario.
Sichert would not disclose how much of Budd's $1.7 billion in annual sales is from SMC parts. The subsidiary of Thyssen AG of Duisburg, Germany, also makes metal auto parts.
