Decoma International Inc. may buy its second lighting company, penning an agreement Aug. 9 with Federal-Mogul Corp. to explore buying that firm's operations.
Decoma of Concord, Ontario, bought the bankrupt Autosystems Manufacturing Inc. of Belleville, Ontario, last year, marrying its own injection molded exterior body panels to lighting to produce front-end modules.
``The evolution is going from just front fascia to everything that's behind the fascia, and that includes lighting,'' said Decoma spokeswoman Molly Fitzpatrick.
A buyout of Federal-Mogul's lighting would bring Decoma additional manufacturing units in Hampton, Va., and Matamoros, Mexico, an assembly site in Toledo, Ohio, and distribution center in Brownsville, Texas.
The letter of intent is nonbinding, Fitzpatrick said, noting Decoma is in the due-diligence process now. The purchase would require the approval of a bankruptcy judge. Federal-Mogul filed in October for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, seeking relief from asbestos-related legal issues.
Like Autosystems, Federal-Mogul's lighting is focused on forward headlamps. Its manufacturing operations include injection molding for lamps and lenses.
Southfield, Mich.-based Federal-Mogul has had the lighting systems up for sale previously. In 1999 it announced it would seek a buyer, but withdrew that attempt by February 2000. It quietly started shopping the division again in mid-2001.
Decoma, meanwhile, had no lighting until its Autosystems purchase, instead buying nearly $20 million worth of headlamps and other lights for its front-end systems. The company still buys lights, and probably will continue even if it adds Federal-Mogul's holdings, since automakers sometimes specify lights from certain suppliers, Fitzpatrick noted.