Walbro Corp. plans to divest its 80 percent ownership share in plastic drum blow molder U.S. CoExcell Inc. by the end of the year as part of a newly announced restructuring program.
Walbro, a Cass City, Mich.-based automotive supplier, announced Nov. 21 that it will shed some of its noncore or underperforming businesses worldwide to take advantage of other growth opportunities.
The firm's plans include the jettisoning of CoExcell, a maker of blow molded high density polyethylene drums for the chemical, pharmaceutical and food industries.
Publicly held Walbro had purchased a majority interest in CoExcell in 1995 after the original owners found themselves underfunded, said Walbro's chief administrative officer, Daniel Hittler. The start-up blow molder was founded in 1993.
``It's not a core business for us,'' Hittler said. ``We do not have a definitive agreement, but we plan to dispose of it before the end of the year. Their business is solid, but it's a nonstrategic operation for Walbro.''
The Walbro subsidiary — which changed its name in 1994 from U.S. Container Inc. — has modest sales of more than $1 million but upward growth potential, Hittler said. The Ohio company will continue to operate under new ownership, he added.
U.S. Container invested about $6 million in 1994 to make multilayer plastic drums. Plant size and equipment totals were not disclosed. CoExcell President Robert Huebner was unavailable before deadline.
Walbro also announced that it would divest its small, minority interest in blow molder Saginaw Plastic Molding Inc. in Saginaw, Mich. Saginaw, which supplies the toy, appliance, automotive industries and print toner cartridge industries, employs 48 at its 30,000-square-foot facility.
Saginaw majority owner Lawrence Crawford referred all calls to Walbro. The company does about $2 million in sales.
Walbro will write off assets for obsolete equipment and inventory at both Saginaw and CoExcell, Hittler said.
Walbro also is considering reducing its 50 percent ownership stake in a plastic fuel tank and fuel pump operation in South Korea, he said. The other partner is Daewoo Precision Industries, a subsidiary of carmaker Daewoo Motor Co. Ltd. The 35,000-square-foot plant in South Korea employs about 250.
In addition, Walbro said that it either would sell or close a 150,000-square-foot steel fuel rail plant in Ligonier, Ind. and concentrate on its plastic fuel rail operations in Meriden, Conn. A buyer for the Ligonier plant has come forward, but no agreement has been signed, Hittler said.
The company also will close a small-engine manufacturing plant in Singapore and write down some of its overvalued assets in Europe.
Walbro is a leading supplier of automotive fuel module systems. The company, which last month announced construction of a new fuel tank blow molding plant in Detroit, recorded sales of $585 million during the past fiscal year.