DETROIT — With a substantial leg up from Lear Corp., minority-owned supplier NYX Inc. will open a new injection molding plant in Detroit's Renaissance Zone.
The zone, earmarked for minority-owned companies wanting to locate in Detroit, will be home to a 48,000-square-foot NYX plant due to open in the next 60 days, said Chief Executive Officer Chain Sandhu.
With Lear's help, the molder is moving on a fast track to open the facility, Sandhu said. An agreement was reached in mid-May for Lear to provide both significant new business and mentoring help for workers at the plant, Sandhu said.
Plastics processor NYX is working out arrangements to purchase the building, now used as a warehouse. The company initially plans to invest $5 million to buy the building and equipment, Sandhu said.
Lear eventually plans to source as much as $20 million to $25 million in new business to the NYX plant, said Charles White, director of supplier diversity and development for Southfield, Mich.-based Lear.
Within the first year of plant operations, total work contracted from Lear — one of the world's largest automotive-interior suppliers — will approach $5 million to $10 million, said Mike Brooks, NYX director of sales and marketing in Plymouth, Mich.
NYX, based in Livonia, Mich., plans to begin shipping its first interior parts to Lear by Aug. 1, Sandhu said.
``As a minority company, we're committed to providing opportunities for other minority [workers],'' Sandhu said in an interview May 26.
``At the same time, we have to make certain that the customer is taken care of. With Lear's encouragement, we can do both in Detroit.''
Lear is part of a snowballing auto industry trend to increase the sourcing of parts from minority-owned companies. Automakers and large suppliers alike have set goals of sourcing at least 5 percent of their annual business in North America with those companies.
Some suppliers, most recently Johnson Controls Inc. of Plymouth, and Dearborn, Mich.-based United Technologies Automotive Inc. (which was bought by Lear this spring), have formed joint ventures to boost minority sourcing.
Lear's agreement, while not a joint venture, will help a minority-owned supplier grow on its own while providing a financial underpinning to get the new plant started, White said May 25 during the Michigan Minority Procurement Conference in Detroit.
Lear already has met its 5 percent minority sourcing target, White said. The company outsourced about $136 million in contracts to minority-owned companies last year and plans to increase that to about $175 million in 1999, he said.
Before the UTA acquisition, Lear recorded about $9.1 billion in sales last year. This year, sales are projected at more than $12 billion.
Lear also is discussing a similar arrangement — providing contracts to help a company set up shop in Detroit — with Nu Tech Plastics Engineering Inc., a minority-owned injection molding and engineering company in Grand Blanc, Mich.
Details of that agreement are expected to be released in June, said Joe Harris, Nu Tech director of marketing and sales.
NYX eventually plans to open its plant to other customers, Sandhu said.
The plant initially will have seven injection presses with clamping forces of 80-700 tons, and secondary equipment. Within a year, NYX expects to reach a dozen presses, Sandhu said.
The company will mold a variety of interior trim pieces, including side pillars, seat side shields and console components, Brooks said.
Many of the parts sent to Lear will use customized, in-mold color. The parts primarily will be molded from polypropylene or ABS resins, Brooks said. The parts used by Lear mainly will go on General Motors Corp. vehicles, White said.
NYX will receive as-yet-undetermined tax incentives from Detroit and Michigan for moving to the Renaissance Zone, Sandhu said.
Sandhu, an immigrant from India, bought a majority share of NYX in 1989 after working 18 years for GM. The year he bought the company, NYX recorded about $1.2 million in sales.
Last year, sales had risen to $80 million, Sandhu said.
The company ranked 93rd on Plastics News' list of injection molders, with $50 million in 1998 injection molding sales in North America. Lear ranked third on that list with $720 million in molding sales.
The Detroit plant will be NYX's eighth location, all in the Detroit area.
Besides injection molding, the company performs extrusion, PVC compounding and steel stamping at various facilities.