PARIS – Ford is giving its former Visteon fuel-tank business to the French supplier Plastic Omnium Auto Inergy in exchange for Inergy’s construction of a new factory in Southeast Michigan.
The $30 million plant, to open in 2013, will replace one in Milan, MI, that makes 1.3 million blow-molded plastic fuel tanks a year for Ford.
Many workers at the Milan facility are expected to move to the new one, and the United Auto Workers union will continue to represent them. Inergy takes over management of the Milan factory June 1.
The deal is a coup for Inergy, which last year produced 12 million fuel tanks worldwide for sales of E1.2 billion ($1.7 billion).
It expands the Inergy operation, which already is the world leader, by 10% and adds Ford to the major customer list.
As Inergy fuel tanks sell for an average $140, the $30 million investment in the new facility could bring additional turnover of $180 million annually.
Inergy presently has three plants in North America – in Adrian, MI; Anderson, SC; and Ramos, Mexico; – making fuel tanks for General Motors, Hyundai, Nissan and Chrysler. With the Ford business, Inergy expects to produce 15 million fuel tanks in 2012.
Ford created Automotive Components Holding in 2005 to run the Milan plant and others that had belonged to Visteon, its component company spin-off. Visteon couldn’t make the tanks profitably.
Until now, Ford had been a minor customer of Plastic Omnium, accounting for less than 2% of the supplier’s E3.1 billion ($4.4 billion) automotive business, which also includes exterior plastic panels. The fuel-tank business will boost Ford to about 6% of Plastic Omnium’s turnover.
Ford’s Milan plant is the largest producer of fuel tanks in the world, according to its page on Facebook, so the new Inergy facility should claim that title.
Inergy currently has 25 plants worldwide making 12 million fuel tanks. The new one will be twice as large as an average Inergy factory.
The Ford business is Inergy’s first UAW operation.
“This is another important step in our strategic plan for Automotive Components Holdings,” says ACH President Mark Blair, “and it is a great opportunity for the employees at Milan.”
Inergy says the UAW took part in the negotiations with Ford, which did not want to invest in the required modernization of fuel-tank production.
“Fuel tanks today are complex and highly technical,” says Inergy spokesman Tarick Dali. “It is now the business of specialists.”