DETROIT — Ube Machinery Inc. has won a potentially lucrative, long-term contract from Ford Motor Co. as the sole supplier of large-tonnage injection presses in North America, company officials said last week.
Ube officials estimated the contract to be worth more than $57 million in sales during the next five years. The firm, which bases its U.S. operations in Ann Arbor, Mich., won the contingent, five-year rights in a bidding war with at least four other equipment suppliers, industry sources said.
The contract could lead to the sale of more than 100 Ube injection presses through the year 2002 to Dearborn, Mich.-based Ford's Visteon parts-making unit, said Jason Forgash, Ube's injection molding machine sales engineer for the Ford account.
``We've been working with Ford since 1993,'' Forgash said. ``But this represents a whole new step for us. It will be our largest current contract in North America.''
Visteon is recognized by industry experts as potentially the world's largest processor of plastic automotive parts. The Ford business unit operates 74 plants and recorded 1997 sales of $16.4 billion. The company said last year that it wanted to step up its sales volume by conducting as much as 20 percent of its work outside Ford.
Visteon officials would not confirm the contract award late last week.
According to equipment suppliers, Engel Machinery Inc. was awarded sole rights to provide large-tonnage injection presses to Visteon's European operations.
Engel sales manager James Moran, speaking from the company's York, Pa., U.S. office, said the company already had been a major Ford supplier to European plants.
Moran and Forgash disagreed on which supplier was awarded the rights to supply Visteon and Ford presses to developing nations such as China, India and Brazil. Moran said Engel and Ube will split the rights, while Forgash countered that Ube would be the sole supplier for emerging nations.
Engel will continue to provide Ford with special injection machines in North America for such processes as coinjection molding, multicolor work and low-pressure molding, according to Moran.
Ube and Engel shared the previous five-year, global contract at Ford, Forgash and Moran said. During that time, both companies provided more than 100 presses apiece to Ford and Visteon plants worldwide.
``The new contracts express Ford's desire to buy standard machines from two companies that it knows quite well,'' Moran said. ``But we both must continue to be competitive [in pricing]. There are no guarantees that the business is absolutely assured.''
After a three-year period, Ford will review its equipment contracts with the suppliers, Forgash said. If the work is deemed satisfactory, the automaker will extend the agreements another two years.
Under the contract terms, the companies will provide injection presses with clamping forces ranging from 300-4,000 tons. Smaller-or larger-ton presses will be bid out to suppliers on a project-by-project basis.
Bids needed to be submitted to the automaker by Aug. 1, and the companies were notified in mid-January of the decision, according to Forgash.
Moran said he could not estimate the size of the European contract with Ford in sales dollars, nor should Ube for its North American pact.
``Ford never issues contracts for dollar values,'' he said. ``We won't know how much equipment the company will need until they order it.''
Forgash agreed, but said his company could provide a forecast based on the expected need by Ford to replace older equipment, expand its plants and open new facilities.
Ube currently had no new Ford orders on its books, Forgash said. The company expects to build presses with clamping forces of as much as 1,500 tons in Ann Arbor in 1998 and as high as 2,500 tons next year, he added.
Forgash would not speculate on why the company received the contract.
Moran said the weak Japanese yen, which could act as a hedge against price increases, could have been a factor. Ube's parent company is based in Ube, Japan, while Engel headquarters are in Schwertberg, Austria.
Moran warned that Ford's decision could change if Visteon's plants begin to exercise their own purchasing authority.
``You must consider that there could be many changes in how Visteon elects to do business,'' Moran said. ``They could continue to have a strong Dearborn center of focus or determine that it should be locally driven.
``The Visteon group is still in a period of evolution.''
