Collins & Aikman Corp. will bring more than 40 injection molding presses to the new plant it is building in Mexico as part of a deal to supply Ford Motor Co.
The Troy, Mich.-based auto supplier has not revealed details about its investment in the new plant it will build in Hermosillo, Mexico, to produce much of the interior for Ford's Futura sedan platform. But during a Nov. 13 conference call, Chief Executive Officer and Chairman David Stockman did mention a few specifics.
The supplier and the Dearborn, Mich.-based automaker had announced C&A's selection as a systems leader for the midsize platform in October. Collins & Aikman will make and oversee nearly every element of the vehicle interior except seats and an overhead unit, Stockman said.
In addition, the company will be the preferred second-tier injection molder for other companies at the new supplier park adjoining the assembly plant.
In all, the firm expects to have presses from 100-4,000 tons in a facility that will be between 400,000 and 500,000 square feet in size.
The work will be worth more than ``several billion dollars,'' Stockman said, which will be important for the company moving forward.
C&A posted a net loss of $32.1 million for the third quarter on sales of $902.2 million. For the first nine months of 2003, it had a net loss of $47.6 million on sales of $2.97 billion. In 2002, the company had a net loss of $45.2 million for the third quarter on sales of $922.5 million and had year-to-date losses of $48.2 million on sales of $2.92 billion.
Stockman maintains the cost of revamping the business - including a cut of 750 salaried jobs during the third quarter - will hit the bottom line in the short run, but improve long-term profitability.
The company said it expects restructuring charges of $11 million during the next two quarters, but an overall reduction in fixed costs of $75 million annually.
``We will not be satisfied until every single quarter is in the black,'' he said.
C&A also is increasing its emphasis on a better return on investments.
The company backed out of a previous contract win with DaimlerChrysler AG to supply interior trim to the carmaker's midsize vehicles because, Stockman said, it later determined that the winning bid would take too long to make a profit, considering the upfront investment requirements.
The ``tightened discipline'' means C&A will decline business that it believes will not pay off, Stockton said.
``Our new approach will permit us to better shepherd our financial resources in the near term ... to the most promising new opportunities available to us,'' he said.