“Current business conditions” have been cited as the reason for Ford, Automotive Components Holdings (ACH) and Johnson Controls terminating their memorandum of understanding (MOU) for the sale of ACH’s Saline (Michigan) plant and interiors business.
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“The decision was made by mutual agreement in light of current business conditions,” the three parties said in a statement.
The MOU was signed in November 2007 and the companies have been in talks since then.
“Business conditions have deteriorated dramatically over the past several months. Higher gasoline prices, weakness in the housing industry and a slumping market for trucks and SUVs made negotiations increasingly difficult. These factors, coupled with circumstances unique to this deal, all contributed to the end of negotiations toward a final agreement,” the statement added.
“We’re disappointed, but due to a variety of factors, the timing was not right to complete this particular deal,” said Bill Connelly, CEO, Automotive Components Holdings. “Johnson Controls is, and will remain, a valued partner of Ford and ACH.”
ACH said it was considering all options and no decisions had been made about the future of the Saline plant, except that ongoing operations will continue beyond 2008.
ACH would continue to restructure its interiors business to make the plant more competitive and attractive to potential buyers.
The plant covers 1.6m square feet on 189 acres. Products include instrument panels, cockpits, door trim, and consoles for a variety of Ford vehicles.
Automotive Components Holdings was established by Ford in October 2005 to continue supply of components and systems while ACH facilities, formerly owned by Visteon, were prepared for sale or disposal. ACH has so far completed the sales of five plants and one business unit from a sixth.
