DETROIT — Fanning out its truck parts operations, Cambridge Industries Inc. has acquired a West Coast producer of plastic body panels and is considering the purchase of a Mexican custom molder.
In mid-January, Cambridge, based in Madison Heights, Mich., bought Livingston Inc., an Auburn, Wash., maker of heavy truck parts from thermoset materials. Terms were not disclosed.
Cambridge plans to expand the plant to add an assembly area for area truck manufacturers.
In addition, Cambridge has signed a letter of intent to buy three plastic parts facilities from Consorcio G Grupo Dina SA de CV, said Cambridge President Kevin Alder.
The companies have entered final negotiations and hope to wrap up an agreement by the end of February, Alder said. The firms signed the letter of intent in early January.
The parties still have several issues to resolve before a deal can be struck, added Cambridge Chairman Richard Crawford.
``We went after it to cement our Mexican presence,'' said Alder, whose company currently has no plants in Mexico. ``It's important to broaden our North American base there.''
Dina, Mexico's largest producer of trucks and buses, operates both a compression molding and hand lay-up composites plant at its Ciudad Sahagun, Mexico, complex, located west of Mexico City. In 1994, the captive parts plants began taking on outside contracts with car and truck producers.
Also included in the negotiations is Dina's Frank Fair Industries Ltd. molding plant in Winnipeg, Manitoba. The Canadian site is a subsidiary of bus maker Motor Coach Industries International Inc., a Phoenix-based company that Dina acquired in 1994.
Alder also said talks have broken off to buy injection molder Huron Plastics Group Inc. of St. Clair, Mich. A letter of intent was signed in August to acquire the company's assets for $75 million, according to Securities and Exchange Commission filings.
However, the sides could not agree on the purchase price, Alder said. Negotiations might not resume, he added.
The Livingston purchase gives Cambridge an entree to a thriving truck market in the northwest United States. The acquired company, known as Livingston Molded Products, makes composite hoods and structural exterior and interior parts, primarily for a Kenworth Truck Co. plant in Renton, Wash., said former owner Robert Morganstern.
The 70,000-square-foot plant performs resin transfer and spray-up molding to create its composite truck parts, he said. The plant also runs a proprietary resin infusion process that Morganstern said was a closed-mold alternative to the spray-up technique. The facility has more than a dozen RTM and spray-up pieces, Alder said.
The company, which employs 140, expects to record about $12 million in sales during 1998, Morganstern added. The 57-year-old owner said the sale to Cambridge will keep the firm moving forward.
``We were out here as a little island, and it made all the sense in the world to join with [Cambridge],'' Morganstern said. ``It was an opportunity for me to keep working and have an exit strategy. We see synergies with a company that will give us a higher market share in plastics.''
A major impetus was the need for Cambridge to establish a West Coast operation, Alder said. The company primarily has shipped its truck parts from plants in Illinois and Indiana. Cambridge's major truck customers include Freightliner Corp.'s plant in Portland, Ore., he added.
``The [Livingston] operation helps us reduce shipping costs and lets us pick up an additional assembly and servicing center,'' Alder said.
Cambridge plans to add 25,000 square feet to the Livingston facility for an assembly area. The company will have the ability to finish and bond parts before shipment to truck assembly plants. The assembly facility, the cost of which was not disclosed, is scheduled to open in three months, Morganstern said.
In Mexico, Cambridge plans to buy Dina's long-struggling parts plants. The company's Pl sticos Automotrices SA compression molding plant and Dina Composites SA hand lay-up facility had endured a shutdown in 1995, during Mexico's economic crisis, and frequent operating losses.
The plant recorded more than $7 million in sales during 1994. The companies expected combined sales of $15 million in 1995 and $18.1 million in 1996.
However, Dina also reported $2.4 million in operating losses during 1995 for its plastics parts subsidiaries, said analyst Robert Hulme of brokerage firm Interacciones Global Inc. in New York. The losses may have been the result of some creative accounting, he said.
``It's always very suspect to see a loss in a division when you have substantial sales in another part of the company,'' Hulme said. ``The [plastics operations] may be significantly bigger by selling internally to other parts of the company. It was basically maintained as an integral part of the [bus and truck] operation.''
A November SEC document filed by Dina said the company was in discussions to sell the plants to a third party. In the event the sale fell through, the plastics businesses would become operating subsidiaries of the company, the document reported. Dina officials did not return several phone calls.
In an effort to grow business in the wake of a tumultuous economy, the Mexican plants began offering custom molding work in 1995. The Dina Composites plant won a contract that year with General Motors Corp. to make RTM hoods for GM's Kodiak trucks in Mexico. The Pl sticos plant made hoods and deck lids from sheet molding compound for Chrysler Corp.'s JX-27 car and compression molded tailgates for Dodge Ram Charger pickup trucks.
In 1995, the Pl sticos plant operated 10 presses with clamping forces of 500-3,000 tons, a trim press and a paint tunnel.
The Winnipeg plant compression molds bus parts. The plant's parent company, Motor Coach Industries, merged with Dina in a $337 million deal in 1994.Cambridge, which operates 18 plants, expects sales of more than $500 million this year.