SOUTHFIELD, MICH. — The Detroit area, home to the U.S. automotive industry, has become the home of Foamex International Inc.'s newly created automotive division.
The move by Foamex, a large maker of flexible polyurethane foam products, was done as part of a corporatewide restructuring to allow each product group to become a separate business unit.
Still, the decision to come to Southfield was left to Gregory Brown, the new executive vice president of Foamex's automotive division. Initially, Foamex asked Brown, who joined the company in July, to start the fledgling division at Foamex offices in Linwood, Pa., near Philadelphia.
But Brown balked.
``To be honest, I'd love to have been in Philly for personal reasons,'' Brown, a New York native, said in an interview at his Southfield office. ``But Detroit is where the market is, and I insisted on bringing a management team here. I got no argument [from Foamex management].''
Brown is now banking that setting up the division in Southfield will provide a catalyst to energize sales for its automotive products.
Until July, when the reorganization was announced, the automotive group was thrown together with other foam product lines managed from Linwood. However, that changed with the creation of five new business units.
The separate units — consisting of carpeting, furniture, bedding, automotive and specialty technical foams — now operate with more latitude in their separate product areas.
The reorganization came on the heels of a major management shakeout in May when company founder Marshall Cogan resigned as chairman and was replaced by Andrea Farace, a Foamex board member. Foamex President John Rallis also left his post, which was handed to Salvatore Bonanno, the company's former executive vice president of manufacturing.
``They've done a lot of work structurally to help themselves,'' said Arnold Brief, an equity analyst with Southeast Research Partners in Boca Raton, Fla. ``[Farace] will help improve their image.
``They've done quite well at focusing on cost cutting and their core polyurethane business over the past few years. The strategy seems to be working.''
One of those new focus areas is the automotive unit.
The group suffered a slight $260,000 dropoff in sales for the first half of 1997, compared with the year before.
Still, the group, which recorded sales of $232 million last year, commands more than half of the $450 million automotive market for PU rolled foam, said analyst Tissa Lee with J.P. Morgan Securities Inc. in New York. The division, which accounted for about a quarter of the company's 1996 sales of $926.4 million, expects to record about $250 million in sales this year, Brown said.
Brown, who will direct operations for the 900-employee automotive unit, said Foamex's renewed investment in his group could boost those numbers. Among Brown's first moves will be to hire finance, purchasing, market development and sales managers to staff the Detroit office, he said. The office previously had served as a small Foamex sales facility.
After that, attention will turn to the unit's manufacturing centers. Plans could include opening a new facility in the Far East later this year and a site in South America in the near future, Brown said.
Initially, the division is expanding its lamination capabilities, Brown said. Foamex's Toronto plant will install a flame bilaminator by mid-October to provide laminated rolled foam for Chrysler Corp.'s 1998 LH-series cars.
In addition, a newly opened Foamex plant in Cuautitl n, Mexico, recently installed a flame trilaminating machine. The Mexican plant is not officially part of Foamex's automotive group, but does much of its business with that division.
``By doing laminating work ourselves, we can share a larger piece of the work and add value for our customers,'' Brown said.
The automotive division currently includes plants in Toronto; Cornelius, N.C.; Morristown, Tenn.; Auburn, Ind.; and Santa Teresa, N.M. The division also has a joint venture with Recticel SA of Brussels, Belgium, to design, manufacture and market each other's PU auto products.
Brown, 42, recently served as vice president of marketing and sales for the Automotive Trim Group of Auburn Hills, Mich.-based Guardian Industries Inc. He also was president of Detroit-based DCT Inc., a materials-handling systems provider, and worked 15 years for General Electric Co., primarily with its automotive group in Southfield.
``I was initially impressed with Foamex's market position in the auto industry,'' said Brown, who was hired by Bonanno, a longtime friend. ``Not only that, but I saw a company that had a good strategy in place and had made a lot of business moves to make it work.''
Foamex, which primarily serves Tier 1 interior suppliers, makes foam products for more than 20 applications, including headliners, carpet flooring systems, seats, trunk liners and door trim.
The company recently launched several new products. They include a patented foam-sculpting technique called Surface Modification Technology, or SMT, that reduces scrap by shaping foam to fit intricate interior surfaces.
A new composite urethane laminate, called Powerthane, also was developed.
Brown said his goal is to grow the company sufficiently to force a move from its confining offices to a more-visible, single-standing site. He also envisioned opening a separate research and development facility in the Detroit area.
``We've invested in business and added technology,'' Brown said. ``Now, we're committed to act with a new team in Detroit. We couldn't be in a better city for that to happen.''