Ford Motor Company has entered into three memorandums of understanding to sell two of its plants in Michigan and a third plant in Mexico. The plants are part of Automotive Component Holdings, a Ford-managed temporary company formed in 2005. Ford says Automotive Component Holdings was created to ensure the flow of critical components to Ford while working significantly to reduce Ford’s material costs over time. The company currently includes 11 plants in the United States and three plants in Mexico.
“We have focused on preparing our businesses for sale to buyers who can grow and invest in them,” said Al Ver, chief executive officer and chief operating office of Automotive Components Holdings. “[These sales are] an important step for Ford’s North American operations and the Way Forward Acceleration Plan, especially as we seek to reduce costs over time,” said Mark Fields, president of The Americas and Ford executive vice president.
The first memorandum of understanding is with Valeo, a global supplier of automotive parts with 130 plants, 65 research and development centers and 70,400 employees in 26 countries and annual sales of more than $13 billion (9.9 billion Euros). The agreement is for the purchase of Automotive Components Holdings’ climate control business including the Sheldon Road Plant in Plymouth Township, Mich.
The second memorandum of understanding is with Cooper-Standard Automotive, a privately held portfolio company of the Cypress Group and Goldman Sachs Capital Partners Funds that employs more than 16,000 across 61 facilities in 14 countries. The agreement covers the purchase of Automotive Components Holdings’ fuel rail manufacturing operations at its El Jarudo, Mexico plant.
And the latest memorandums of understanding is with Flex-N-Gate, a privately held supplier of automotive components with 40 plants in Spain, North and South America employing more than 10,000 people. The agreement is for the sale of Automotive Components Holdings’ fascia and fuel tank business including the Milan, Mich. plant.
Sales of the Michigan plants are contingent upon the negotiation of a new and competitive agreement with the United Auto Workers union for each plant.