In a restructuring move, Trinova Corp. plans to sell eight plastic molding and assembly plants owned by its subsidiary, Aeroquip Corp., and leave the automotive interior trim business.
The publicly held company is negotiating with several potential buyers, it said. The plants generated about $130 million in sales during 1996.
Trinova plans to exit interior trim operations completely by the third quarter of 1997. If no buyers are found by that time, the plants will be closed, said Trinova Vice President William Ammann.
``It's certainly our intent to move as swiftly as we can to find a buyer,'' Amman said in a telephone interview from Trinova's Maumee, Ohio, headquarters. ``They are all good facilities. However, we think they would be better suited to larger, integrated suppliers that focus on interior plastics.''
The plants for sale are in Mooresville, N.C.; Kendallville, Ind.; Port Huron, Spring Arbor and Mount Clemens, Mich.; Chihuahua, Mexico; and Roedelheim and Beienheim, Germany. They employ about 1,500.
In Mount Clemens, the proposed sale only affects Aeroquip's Chesterfield plant. The company has three other fluid-connector parts plants in the city.
The eight facilities produce garnish moldings, interior engine covers, instrument panel clusters, radio bezel assemblies, air-vent assemblies and other trim products. The plants range in size from 44,000-344,000 square feet.
Six plants perform thermoplastic injection and compression molding, with an estimated total of 149 presses with clamping forces of 75-1,500 tons. The other two plants do assembly work, painting and metal stamping and bending.
Recently, the plants had suffered an aggregate decline in sales volume and were operating at a loss, Amman said. The company decided to sell its interior trim operation instead of making the significant investment required to compete, said spokesman Peter Parsons.
Parsons said much of the sales slide was caused by the shift in interior business to larger, Tier 1 companies capable of producing lower-cost modules from multiple components. The major players in interior trim applications include mega-suppliers such as Lear Corp. of Southfield, Mich., Prince Automotive of Holland, Mich., and Findlay Industries Inc. of Findlay, Ohio.
``Most companies in that industry have grown considerably through acquisitions or mergers so they can supply entire systems,'' said automotive equity analyst David Andrea with Roney & Co. in Detroit. ``They've also expanded globally. Trinova's decision says to me that they
didn't want to make, or couldn't make, those kinds of commitments.''
Industry experts said the plants could sell for $26 million to $78 million. The price could vary depending on upcoming contracts, the plants' operating conditions and other market factors.
With the sale, Trinova will concentrate on its other core businesses. Aeroquip's automotive operation includes fluid connectors, which are hoses and attached fittings for heating, power steering and oil cooling systems. The firm also has a joint venture with Inoac Corp. of Nagoya, Japan, to make exterior trim components in North America.
Trinova's automotive fluid connector business is a large moneymaker. The company expects fluid-connector sales of $85 million in 1997 and $105 million in 1998, Parsons said.
Aeroquip has 12 other automotive plants besides its interior trim facilities.
Trinova is a holding company for Aeroquip and its Vickers unit, both in Maumee. Besides automotive work, the companies make parts for the aerospace and industrial hydraulics markets.
Trinova also announced it will change its name to Aeroquip-Vickers Inc., pending shareholder approval at an April 17 annual meeting.
``Our customers identify us with those companies, not with the Trinova name,'' Parsons said.
Aeroquip was 30th in Plastics News' 1996 ranking of North American injection molders, with $104.6 million in relevant sales. Together, Trinova and Vickers generated combined 1996 sales of $2 billion, compared with $1.9 billion the previous year. Profit was $102.7 million, compared with $94.9 million in 1995.
The firm, traded on the New York Stock Exchange, will take a 1997 pretax charge not to exceed $30 million, or 61 cents per share, to sell the plants. Much of the charge comes from exiting two of its largest plants—the 344,900-square-foot Roedelheim facility and the 150,900-square-foot Beienheim plant.