Wanxiang Acquires Neapco from Ford
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Mar 20,2008
Wanxiang Acquires Neapco from Ford
Neapco Drivelines LLC (a division of Wanxiang Group, China) has acquired the driveshaft business unit from Ford Motor Company. The driveshaft business unit, housed in Ford's Monroe facility, had been shuffled to Ford's Automotive Components Holding division as a preliminary step to sale as a non-core business unit.
Seventeen underperforming businesses had been moved under Automotive Components Holding since it was formed in 2005 to take over Visteon plants spun off in 2000. Even though MOUs have been signed for five of the business units, Ford's inability to reach Visteon/Ford "employee leasing" agreements with the United Auto Workers in each plant have stalled the deals. Driveshaft is the first to actually be completed.
Neapco, headquartered in Pottstown, Pennsylvania, supplies drivelines, steering shafts and components for OEM and aftermarket automotive, truck, agricultural, off-highway and specialty vehicle applications. The company has production facilities in Pennsylvania, Nebraska and Mexico.
The driveshaft business occupies only 20% of the Monroe plant, which also produces a variety of other components. Neapco will move it from Monroe to a facility in Van Buren Township, near Detroit, "which will improve the competitive position of the operation." Approximately 300 workers will be offered the opportunity to move from Monroe to the new facility, or stay in the Visteon/Ford system.
"Acquiring the Monroe propshaft business is a natural extension of our strategy of providing top quality driveline technology at world-class costs coupled with local engineering, assembly and logistics management," said Robert Hawkey, Neapco's president and CEO. "Resources from the Wanxiang Group, a top 100 company in China and one of the world’s strongest and fastest growing suppliers to the automotive industry, provide us with a unique advantage."
Annual sales are expected to be in the $300 million range.
Neapco management and Carlyle Group acquired Neapco in a $36 million 2006 leveraged buyout from United Components Inc. Wanxiang bought out Carlyle's share in mid-2007.
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