Swiss molder Sarna Group is restructuring its automotive unit, closing one factory in the United States and two in Germany as it shifts its production focus to articulated modules and moves some assembly to lower cost countries.
The Sarnamotive division will close one of six injection molding plants in Michigan within Sarnamotive Blue Water Inc. and two of four sites in Ludenscheid, Germany, the Sarnen, Switzerland-based firm announced Nov. 14.
About 100 people work at the Blue Water plant in Marysville slated for closure by the end of March. The company plans to consolidate operations and equipment at other factories in the region. Eighty to 90 percent of the Marysville employees will have a chance to move with them, said Larry Eisenga, vice president human resources.
The bulk of the company's facilities are within 20 miles of Sarnamotive Blue Water's headquarters, also in Marysville.
About 350 jobs will be cut from Germany. Sarna plans to gradually move labor-intensive assembly work to lower wage countries in Europe, including its factory in Liberec, the Czech Republic.
In addition, the company will focus future growth on what it calls ``kinematic'' modules for the auto industry - mobile systems such as movable cup holders - and on surface quality materials in Europe. It plans to emphasize air flow management systems and introduce kinematic modules in North America.
Automotive will remain a core strategy for Sarna Group along with the construction industry centered in its Sarnafil division, Sarna officials said.
Sales dropped for Sarna's Sarnamotive North America division for the first six months of this year, down to 104.3 million Swiss francs ($79.3 million) compared with SFr148.8 million ($113.3 million) for the same period in 2002. Sales for Sarnamotive Europe were down 1.2 percent to SFr135.1 million ($102.9 million).
The company does not break out profit for its individual divisions.
For all of Sarna, net profit was SFr3.8 million ($2.9 million) for the first half of 2003 on sales of SFr387.3 million ($303.8 million), an 80 percent drop from 2002 net profit of SFr20 million ($15.2 million) on sales of SFr465.4 million ($355.4 million).
The drop in net profit reflects falling sales in North America along with investments in the Czech Republic and Germany.
With the changes, Sarna expects to hit annual growth of about 10 percent annually by 2006, Chief Executive Officer Matti Paasila said in a news release about the restructuring.
``The reduction of operational costs with increased capacity utilization is necessary to counter the price pressure by the [original equipment manufacturers],'' he said.