North American molding giant Textron Automotive Co. is making its corporate debut in South America, buying a majority stake in Brazil's Plascar Ind£stria e Comercio Ltda. Textron took over London-based Invensys plc's 56.6 percent interest in Plascar by assuming $35.5 million worth of debt. The remaining 43.4 percent of Plascar will continue to be publicly traded.
The purchase brings Textron a company with $108 million in sales last year and five manufacturing sites.
"It's kind of surprising that we haven't been there yet, but we wanted to get the right kind of an opportunity," said Kirk Aubrey, Textron's executive vice president for marketing, communications and e-business.
Troy, Mich.-based Textron Automotive had more than $2.9 billion in sales in 1999, and manufacturing sites in 15 countries. With about $1.7 billion of those sales related to plastics injection molding, the firm topped Plastics News' most recent annual ranking of North American injection molders.
Carmakers want their top suppliers everywhere they are, however, meaning the businesses needed a foothold in South America, Aubrey said.
"As the auto industry globalizes, there are places you need to be to do business," he said.
Textron Automotive's parent company, Textron Inc. of Providence, R.I., has a Fluid and Power Systems division operation in South America, but the auto unit did not have a presence there, Aubrey noted.
Plascar, which eventually will change its name to Textron as it is absorbed into the Automotive Trim Division, is based in Jundiai, Brazil, with facilities in Jundiai, Betim, Varginha and Sao Paulo, Brazil, and Rosario, Argentina.
Carmakers produced more than 1.3 million cars in Brazil last year and nearly 300,000 more in Argentina.
Plascar's 2,084 employees already produce instrument panels, door panels, interior trim and lighting for General Motors Corp., Ford Motor Co., Volkswagen AG and Fiat SpA.
Buying into an established business helps Textron establish itself quickly, Aubrey said.
"It ends up being a great kick start for us in a new market," he said.
In addition, the firm plans to transfer its technical specialities to South America to help it win even more contracts, he said, but noted the business already has many similarities to its new U.S. counterparts.
"It's so similar to our business that we're not going to have to make a lot of changes," Aubrey said. "We can bolt this on."