TORONTO - Tarxien Corp. is counting on new injection molding contracts with General Motors Corp. to return it to profitability. The Ajax, Ontario, firm will begin molding roof panels this month for the redesigned Saturn car. The contract should generate sales of C$10 million (US$7.3 million) this year, and C$25 million (US$18.3 million) to C$30 million (US$21.9 million) in subsequent years, Tarxien President Ralph Zarboni estimated at his company's recent annual meeting in Toronto.
Tarxien first announced the contract last year.
Zarboni also revealed three new GM contracts to mold door handle systems beginning in 1997 for 1998 models.
In a telephone interview, Zarboni confirmed that those con-tracts will be worth about C$8.6 million (US$6.3 million) annually.
Tarxien said it invested C$12.8 million (US$9.3 million) in new molding and painting capacity designed to expand its thermo-plastic automotive parts molding business.
The firm expects losses in its second and third quarters, but Zarboni said it should be profitable for the full year. It made a profit of C$829,000 (US$605,000) for the first quarter ended, March 31, because of a gain of C$1.8 million (US$1.3 million) from the sale of its Cobourg, Ontario, thermoset automotive parts molding plant to Budd Co. of Troy, Mich.
Sales slipped nearly a third to C$11.8 million (US$8.6 million) from C$17.3 million (US$12.6 million) in the previous year's first quarter, when its profit was C$910,000 (US$664,000).
Zarboni blamed lower production volumes and profit margins at its Ajax injection molding plant for the weaker financial results this year.
He said termination of a pro-duction agreement with Triam Automotive Inc. of Toronto did not have a major effect on financial results.
Last year, Tarxien began a contract to paint Cadillac exterior parts molded by Triam. Tarxien stopped the painting work at its Concord, Ontario, plant in December, Zarboni said.
He said the contract was not profitable and Tarxien wanted better terms. He would not comment further because the two companies are seeking legal action.
James Nicol, Triam chairman and chief executive officer, would not comment on the legal actions, but he said Triam still has the Cadillac molding contract.
It is making the parts at its Stoney Creek, Ontario, plastics division, which has 24 injection presses, including one with 3,000 tons of clamping force.
Triam became a public company last summer. It was founded by Nicol and David Copeland, former executives with auto-motive parts maker Magna International Inc. of Markham, Ontario.
Triam bought the 100,000-square-foot Stoney Creek plastic operation and metal operations in Tecumseh, Ontario, and Sterling Heights, Mich., from a group of private investors.