Meridian Automotive Systems Inc. has made it through a tough year in the automotive industry, but even though conditions in the auto sector look even bleaker for 2008, the company is expanding for new business.
Meridian will open a new plant in Hermosillo, Mexico, by October to injection mold bolsters for Ford Motor Co. while a new plant in Saltillo, Mexico, will open by early 2009 to mold thermoset composites for commercial trucks.
In addition, the company recently leased another 20,000 square feet in the Allen Park building that houses its 30,000-square-foot headquarters to create room for more engineers, which it expects to need for future business. It also launched production of a line to chrome- plate ABS and ABS/polycarbonate plastic trim parts at its Ionia, Mich., operations, opening a new product line for itself.
``This is a difficult industry,'' President Richard Newsted said in a Dec. 4 interview at Meridian's headquarters. ``Production was down this year. Some of the forecasts say that production may be at its lowest level in 2008 since 1995. But for all practical purposes, we've accomplished all that we wanted to for this year.''
Meridian emerged from Chapter 11 bankruptcy protection at the end of 2006, anxious to win new contracts and re-establish confidence in itself with both customers and suppliers. It struggled as the commercial and heavy-truck business, which is a major customer, dropped production 15 percent over an already anticipated 35 percent drop in manufacturing.
Resin prices continued to climb, putting a squeeze on Meridian along with every other plastic molder. Meridian closed plants in Jackson, Ohio, and Grand Rapids, Mich., to consolidate production.
While Newsted would not provide precise answers for the privately held company's finances - or discuss how much Meridian will spend on its new plants in Mexico - he said the company expects to ``approach'' $700,000 in sales for 2007, compared to a little more than $800,000 for 2006. But what is important, he said, is that the company is profitable.
Meridian has more business coming in - including work to fill the two new plants in Mexico - and has had good feedback for the chrome-plated plastic used in the grilles for Ford Motor Co.'s Expedition and Lincoln Navigator sport utility vehicles.
The molder also is anxious to complete negotiations for its proposed purchase of an Automotive Components Holdings LLC lighting plant in Sandusky, Ohio, from ACH parent Ford, of Dearborn, Mich. The plant makes headlamps and other lighting for 60 percent of Ford's vehicles, which would provide Meridian with a steady stream of business, while boosting its capability to supply a more extensive front-end module.
The companies announced the planned acquisition in June, but discussions were put on hold until Ford completed negotiations with the United Auto Workers for its new labor contract.
The company and the industry is making steady improvements in their products despite economic struggles, said Fran Le Veque, executive vice president and chief communications officer. New developments that will debut in the next three to four years are under development now, even if it may seem like the economy is stifling innovation now.
``You can't see what's around the corner until you see what's at the end of the street,'' he said.
A year after bankruptcy, Newsted said that the future looks good, even if the industry's conditions seem harsh.
``We're creating a much more stable environment,'' he said.