The decision by Husky Injection Molding Systems Ltd. to stop actively producing large-tonnage presses for automotive molders extends to all large-machine markets although Husky officials pledge to continue building big ones for existing customers.
Company leaders are adjusting Husky's product mix to focus on injection presses for packaging and PET preforms, the strongest market for the Bolton, Ontario-based company. Husky will continue to take repeat orders for its large-tonnage Quadloc presses, but no longer will invest in new technology for the big-press sector, and will not actively seek brand-new customers.
Husky also is selling its technical center in Novi, Mich., asking $13 million for the 115,000-square-foot building. That building was listed on the market at the end of May, Husky said. About 10 Husky employees will be laid off, and some others will be relocated to other technical centers, said Jeff MacDonald, vice president of marketing.
He said Husky plans to maintain an office in the Detroit area, in a smaller building.
MacDonald said Husky's packaging machinery business is solid, and hot runners are selling well in North America and globally. Automotive, which accounts for the majority of the large-press market, is going through tough times, especially in North America, while packaging tends up to hold up even in bad economic times.
``It's more of a question of just directing our resources in a place that's yielding the most opportunity,'' MacDonald said in an Aug. 5 telephone interview.
Husky, founded in 1953 by Robert Schad, is now owned by Canadian private equity firm Onex Corp. Asked if Onex is leading the new direction, MacDonald said ``absolutely not.''
Onex is supporting decisions Husky management has made during the past several months, including the end of serial production of large presses for nonpackaging business, MacDonald said. The strategy calls for balancing Husky's investments around the world.
MacDonald said Onex has a long-term outlook. ``I think there's a tendency with some of the common perceptions of private equity that negative things can come about,'' he said.
Onex bought Husky in December. Under Onex ownership, the machinery maker is planning to build a plant in Chennai, India, to be completed before 2010, a company spokesman said. Initially, the plant will make hot runners.
Husky also will expand its Shanghai factory for the third time. That project is to be completed by the middle of next year.
Husky plans to provide more details soon about both plants, according to the spokesman.
``Onex is supporting decisions like [de-emphasizing large-tonnage machines], but also is supporting some long-term decisions we're making as well,'' MacDonald said.
Husky will continue to sell its metal injection molding machines and hot runners to automotive customers. In that case, the automotive market is one ``where we can bring differentiated value to our customers, and where they truly value that fairly,'' he said.