Regal Plastics Co. Chairman William Pickard has formed a new operating company to unite six minority-owned businesses in an attempt to wield more market clout in the automotive industry.
The new company, called Global Automotive Alliance LLC, includes injection molders, blow molders and assemblers under one umbrella.
Pickard, a prominent minority businessman who also has an interest in a future Detroit-based casino, owns at least 51 percent of all six companies. Together, the Global Alliance partners expect 1999 sales of $150 million to $160 million and about $300 million in sales next year, Pickard said.
Those sales figures would position the Global Automotive Alliance among the top minority-owned suppliers to automakers.
``We'll provide one-stop shopping for many [original equipment manufacturers] and Tier 1 suppliers,'' Pickard said by telephone May 20. ``Anything from interior components to entire fuel tanks to complete bumper fascias will be part of it. We're stronger by offering a broad range of capabilities from one location.''
The alliance weaves together previously scattered holdings by Pickard. It includes a newly formed joint-venture company, Primera Automotive Systems LLC of Wayne, Mich., and several companies purchased by Pickard since 1985, when he bought Regal.
Grupo Antolin, a maker of plastic overhead systems based in Burgos, Spain, owns 49 percent of Primera. The joint venture opened a 51,000-square-foot assembly facility in Wayne on Feb. 1 to produce complete overhead systems, said David Robinson, president of Grupo Antolin North America.
Grupo Antolin will sell its thermoformed headliners to the Primera venture, while Regal will provide visors, grab handles and other components, Robinson said. Currently, the joint venture's primary customer is Ford Motor Co.
Grupo Antolin also has a plant in Hopkinsville, Ky., to make compression molded headliners. The supplier plans to increase the size of that facility from 110,000 to 200,000 square feet by the end of the year, Robinson said. The expansion will accommodate new business with Ford, Robinson said.
Other members of the Global Automotive Alliance include Regal, based in Roseville, Mich.; Camrose Technologies LLC of Ada, Okla., an exterior-parts joint venture with Ventra Group Inc.; Detroit-based Vitec LLC, a maker of plastic fuel tanks; sequencer and assembler ARD Logistics LLC of Suwanee, Ga.; and Commonwealth Regal Industries Inc., an assembler of interior-trim parts in Tecumseh, Ontario, which is a joint venture with Toronto-based Versatech Industries Inc.
Pickard also is close to purchasing a majority share of a German company that primarily wraps leather onto shifter knobs, a part produced at Regal. That company will be added to the alliance when the deal is completed, possibly the week of May 24, Pickard said.
``We want our alliance to be global, and it already spans Spain, Canada and, hopefully, Germany,'' Pickard said.
The new company has started working from a headquarters facility in Detroit, which opened this month. Currently, two Global alliance staff members work on-site but Pickard plans to add more. Pickard will act as chairman and chief executive officer of the company.
One of the key members of the new alliance is Vitec, a joint venture with fuel-system supplier Walbro Corp. of Auburn Hills, Mich. The company, created in 1996, could double the sales of the Global alliance alone during the next year, Pickard said.
Vitec has been awarded contracts worth $700 million from GM and DaimlerChrysler Corp. running through 2003, said Vitec President Bob Huebner. The 147,000-square-foot plant is ramping up for its first GM contract, starting by July.
The facility is opening with two six-layer Krupp Kautex coextrusion machines and 76 employees.
Regal plans to supply plastic parts for fuel-system components made by Vitec, Pickard said.
The Global Automotive Alliance — one of the largest minority-owned automotive businesses — will help heighten the image of those companies with automakers, said Delbert Gray, president and chief executive officer of the Detroit-based Michigan Minority Business Development Council.
Many other minority-based firms are forming joint ventures to obtain the same volume and resources, he said.
``There's a benefit to teaming up,'' Gray said. ``Small minority companies can project themselves as larger, more capable businesses. Bill Pickard is presenting a strong, united front.''
Carmakers such as Ford are encouraging the move. The Dearborn, Mich.-based automaker is giving more business to fewer firms, said Ford spokesman Ron Iori.
In a memorandum of understanding worked out last year with the Small Business Administration, U.S.-based carmakers targeted a goal of outsourcing at least 5 percent of their North American contracts with minority-owned businesses.
Ford met its 5 percent goal last year, specifying about $2.5 billion in supplier purchases from minority-owned businesses, Iori said.
The new venture broadens the work of Pickard's flagship company, interior-trim injection molder Regal Plastics.
The company's 80,000-square-foot Owosso, Mich., plant recently bought two presses with a clamping force of 1,500 tons, said Catherine Pullen, Regal vice president of operations.
The injection presses, the largest at the Owosso facility, were purchased from a former GM plant, she said. The company, with another plant in Roseville, now has 45 presses.
Regal recorded about $35 million in injection molding sales for fiscal-year 1998, according to Plastics News' recent rankings.