AUBURN, IN -- Most headline-grabbing supplier consolidations involve megacorporations gobbling up smaller companies. A lot of creative and strategic maneuvering, however, is taking place out of the spotlight's glare.
One example is Foamex International Inc.'s year-ago purchase of fabric maker JPS Automotive Products Corp. Because fabric is usually attached to foam wherever the latter is used, Foamex Chairman and CEO Marshall S. Cogan decides to buy JPS to expand his company and puts it in a position to benefit from the consolidation trend.
"I have always believed in the marriage of foam and fabric in the auto business," says Mr. Cogan. "There's foam in carpet and headliners, and now they're even putting foam in passenger-side air bags. I saw the opportunity to expand the range of foam to a more valuable fabric."
So far the move seems to be paying off. Foamex International's sales jumped from $696 million in 1993 to $1.08 billion in 1994, 27% of which is from JPS. In the first quarter of this year Foamex records a 51.4% sales increase compared with the same period last year. Mr. Cogan says the increase reflects the addition of JPS as well as notable growth in the cushioning, automotive and technical foam markets.
A quick tour of a few Foamex-JPS plants illustrates the synergy between the companies as well as Mr. Cogan's business acumen.
At the 325,000-sq.-ft. (30,200-sq.-m) Foamex plant here, the company pours foam logs and blocks for automotive applications and for consumer products such as bedding and disposable diapers. "We pour enough in three hours to keep the plant busy all day," says Plant Manager Thomas J. Prodouz.
Automotive customers, including General Motors Corp., Ford Motor Co., Prince Corp., Findlay Industries, Johnson Controls Inc. and others benefit from the plant's ability to die-cut and hot-wire cut foam into seat cushions and backing for other trim parts.
The most obvious example of Foamex-JPS compatibility is seen at the Auburn plant's flame-lamination area. It's here that Foamex foam is bonded to fabric for use in vehicle interiors. "Right now the fabric we use is not from JPS because all of the programs were spec'd before we acquired JPS," explains Mr. Prodouz. "But for future platforms, we will be able to offer better value because of the JPS acquisition."
Auburn also grinds its foam scrap as well as that from customers and other sources, rebonds the leftovers and makes carpet padding for commercial and automotive applications.
Some of that recycled foam padding is shipped to JPS' Greenville, SC, plant, which produces molded and cut-carpet systems for GM, Chrysler Corp., Honda of America Mfg. Inc., Nissan Motor Mfg. Corp. U.S.A., Textron Automotive and other Tier 1 suppliers. The 750,000-sq.-ft. (70,000-sq.-m), two-building operation uses its molding and water-jet-cutting equipment to fabricate, for example, a one-piece trunk liner for Chrysler's LH platform. The easy-to-install one-piece unit replaces a five-piece trunk-floor covering.
Gene Rhymer, vice president-manufacturing at JPS in Greenville, says he expects growth in these sound-deadening components. "Acoustics is the buzz word in Detroit, there's no doubt about it," says Mr. Rhymer.
Another area of growth for Foamex-JPS is interior fabric, which the 500,000-sq.-ft. 46,450-sq.-m) JPS facility in Cramerton, NC, produces at a rate of 300,000 yards each week. In 1989 the Cramerton plant's sales were $35 million. Officials expect receipts to total $90 million this year.
One reason for the increase is that it is one of only two suppliers with double-needle-bar knitting capability (for seats) in addition to tricot knitting (for headliner cloth) and circular knit (for door panels and seats). Double-needle bar machines produce multicolor moldable fabrics that have a velour face, critical for a high-quality interior appearance and feel.
Additional benefits of the Foamex-JPS combination could bear fruit in future products. One in development is a foam-backed carpet system that reduces weight and improves noise absorption. "Foam-backed carpet can save 2.5 lbs. (1.1 kg) of weight for every 10 sq. ft. (0.9 sq. m) of area compared to mass back and shoddy-padded carpet," says John R. Rucker, manager of R&D engineering technology for Foamex.
Other R&D projects under way include a lightweight carpeting with dual-weight characteristics (higher density in high-traffic areas), a thermoformable headliner module that consolidates rigid substrate, soft foam and textile into a ready-to-install single unit, and bi- and tri-laminate products that use flame or conventional adhesives to bond foam to face fabrics and backing substrates replacing costly cut-and-sew processes.