Toyoda Gosei moves on from Meteor deal

KIYOSU, Japan — Toyoda Gosei Co. Ltd. is moving on from a deal it made a little more than five years ago.

The firm has entered an agreement to divest its German production subsidiary Toyoda Gosei Meteor to Aeqph GmbH. The move is part of a global restructuring plan at Toyoda Gosei, which the firm said is aimed toward improving earnings growth.

Under the terms of the agreement, TGM and its U.S. subsidiary Meteor Sealing Systems — which a spokesman confirmed includes the U.S. unit's stake in LMI Custom Mixing L.L.C. — will transfer to Munich-based Aeqph.

Toyoda Gosei said that despite previous restructuring efforts the German business "continued to struggle," prompting the sale "after considering remediation measures." The firm added that the deal is on track to be completed by the end of 2019. Financial details were not disclosed, but Toyoda Gosei said it estimates that it will incur a $192 million loss from the transfer.

Meteoric journey

Based in Bockenem, Germany, TGM was established in April 2014 when Toyoda Gosei acquired the assets of Meteor Gummiwerke K.H. Badje GmbH & Co. K.G. The firm supplies sealing parts, weatherstrips and other rubber components to Daimler A.G., BMW A.G., Audi A.G. and other European auto makers, and employed 1,360 as of March.

At the time of the deal, Toyoda Gosei said Meteor has a strong reputation in sealing parts for luxury vehicles. The acquisition aimed to increase TG's presence in the European market.

Meteor also operates a manufacturing site in Dover, Ohio, which also produces weatherstrips for U.S.-based automotive manufacturers. The site employs 315 people.

Prior to its acquisition by Toyoda Gosei, Meteor and Lauren International had established a joint venture — LMI Custom Mixing L.L.C. — which mixes rubber compounds. Lauren Manufacturing and Lauren Plastics were sold to automotive supplier Cooper Standard Automotive Inc. in 2018, but Lauren International said at the time of the sale it retained its stake in LMI.

In 2016, Toyoda Gosei disclosed a $5 million expansion project that added 40,000 square feet and additional equipment to the Dover site. At the time, the firm said the expansion was in response to one of Meteor's top European customers in addition to added projects from North American original equipment manufacturers.

In a separate move, Toyoda Gosei is expanding production for weatherstrips at its plant in central China.

Set to be complete in May 2021, the firm is going to double capacity at TG Zheng Ao compared to 2018, according to a Nov. 15 news release. A company spokesman said the firm is investing about $9.2 million in the expansion and that the site will span about 340,000 square feet when the project is complete.

The site currently employs about 230, but the spokesman said that figure is projected to reach about 500 at the end of 2022.

Toyoda Gosei acquired a 60 percent stake in Hubei Toyoda Gosei Zheng Ao Rubber & Plastics Sealing Science and Technology Co. Ltd. in December 2018. Hubei Zhengao Automotive Accessories holds the remaining 40 percent of TG Zheng Ao.

TG Zheng Ao supplies weatherstrips to Dongfeng Motor Corp., one of China's biggest auto makers, in addition to other OEM customers in the country. It is one of seven TG manufacturing sites in China, four of which produce weatherstrips.

The spokesman added that sales to auto makers, specifically citing Honda, are increasing in the region, and that the company aims to make TG Zheng Ao a "core location for growing the TG group's business in central China."