DETROIT - Less than two years after launching a major push into the plastic intake manifold business, Freudenberg-NOK has sold its Auttocom joint venture to CMI International Inc. of Southfield, Mich. Terms were not disclosed. CMI, a maker of cast metal and molded plastic auto parts, said it will move the Auttocom business into one of its existing buildings in Monroe County, Mich., where it will invest more than $40 million in the project.
Freudenberg-NOK currently produces the plastic intake manifolds at a plant in Manchester, N.H.
``Several factors have played a role in the sale of the Auttocom manifold business,'' Joseph C. Day, chief executive officer of Freudenberg-NOK said in a written statement. ``They include a consolidation of the manifold supply base and Freudenberg-NOK's decision to focus on its core business.''
Auttocom, 51 percent owned by Freudenberg-NOK, was set up in late 1994 with partner Mecaplast, a molder of plastic auto parts based in Monaco. Mecaplast, which did not have a North American presence, contributed plastic processing technology and had experience producing intake manifolds for the European market.
Freudenberg-NOK, based in Plymouth, Mich., acquired Mecaplast's minority stake in Auttocom shortly before selling the business to CMI, Freudenberg-NOK spokeswoman Sharon Wenzl said.
In 1994, Freudenberg-NOK was producing the plastic intake manifold for the Cadillac Northstar engine, a piece of business that became part of the Auttocom joint venture. By teaming up with Mecaplast, it hoped to rapidly become a major player in the North American intake manifold market that was just beginning to convert from metal to plastic.
But the ill-starred venture ran into problems early on.
Automotive News, a sister publication of Plastics News, reported in January that Auttocom's Manchester molding plant could not keep up with increasing production rates for Northstar manifolds in late 1995. That, in turn, disrupted assembly schedules of certain Cadillac models and the Oldsmobile Aurora, which also offered the Northstar engine.
Auttocom had difficulty boosting output of manifolds, which are manufactured with the lost-core process, a capital-intensive and technologically demanding technique. In lost core, glass-reinforced nylon is molded over a tin-bismuth core, which is then melted out in a hot oil bath, leaving a hollow plastic manifold.
General Motors Corp. and Auttocom said early this year that Northstar manifold production problems had been fixed. In June, Auttocom said it was installing a third lost-core molding line in Manchester.
In announcing the sale of Auttocom on Oct. 4, Freudenberg-NOK said it was currently the sole-source plastic manifold maker for three GM engines: the Northstar, the 2.4-liter Twin Cam four-cylinder engine, and a new 5.7-liter V-8 engine for the 1997 Corvette. Two other manifolds for undisclosed customers are also in production, the firm said.
Auttocom said production of manifolds at its Manchester plant is now ``stable,'' inventories are in place, and ``all customer requirements are being met.''
The acquisition of the Auttocom business is a ``good match'' for CMI, said Rich Nawrocki, executive vice president and chief financial officer.
``It gives us an opportunity to expand our customer base,'' he said. ``We obviously need to protect our market and try to enhance our position within the polymer intake manifold business.''
Nawrocki said CMI, primarily a metal casting business, expected to do better than $600 million in sales this year. Its largest customer is Ford Motor Co.
The Auttocom acquisition will bring in an estimated $40 million to $50 million in additional sales, from both existing supply contracts and new programs under development. The Auttocom business could nearly double CMI's plastic intake production to about 2.7 million units per year, Nawrocki said.
Nawrocki said the Auttocom business was growing, was profitable and had solved its earlier production problems. He declined to discuss GM's role in the acquisition, other than to say the automaker was ``supportive'' of the deal.
CMI is also talking to Mecaplast about forming a technical relationship. These talks are still in the early stage, Nawrocki said. CMI plans to manufacture clamshell, or welded, plastic intake manifolds, a less capital-intensive process that has found favor in Europe.
Freudenberg-NOK, a joint venture between Freudenberg & Co. of Germany and NOK Corp. of Japan, said it will continue to manufacture the plastic manifolds for CMI as the new owner gradually shifts production to its own plants. This transition period is expected to continue through 1999.
Freudenberg-NOK plans to bring in new work to the Manchester plant, securing the employment of the 115 employees now in the manifold business.
CMI also does lost-core molding at Industrias Fronterizas CMI SA de CV, its Nuevo Laredo, Mexico, plant. Industrias Fronterizas supplies intake manifolds to a Ford engine plant in Chihuahua, Mexico.
CMI, with five foundries in North America, produces a wide array of metal auto parts, including intake and exhaust manifolds, suspension and chassis systems, steering and drivetrain components, and cylinder heads and blocks. It also produces parts for the construction, mining equipment and defense markets.