Ford Motor Company and Linamar Corporation have reached a non-binding proposal outlining the framework for the sale of the Automotive Components Holdings (ACH) Power Transfer Unit (PTU) business at the Converca I Plant in Mexico.

This is the sixth agreement regarding an ACH business as ACH moves forward in determining the future for each of its operations. One business has been sold and other sales are pending.

The Converca I Plant in Nuevo Laredo, Mexico, is a leading manufacturer of PTUs in the North American auto industry. Part of the transmission, a PTU transfers power between axles in all-wheel-drive vehicles.

This proposal marks the sixth such agreement reached in the last five months. ACH sold its fuel rail business and its El Jarudo subsidiary in early April. Sales negotiations are continuing regarding the climate control business and the Sheldon Road Plant near Plymouth, Mich.; the fascia and fuel tank businesses and the Milan (Mich.) Plant; the ACH propshaft business, which currently is one of the products produced at a Monroe, Mich., facility; and the glass business and its plants in Nashville, Tenn., and Tulsa, Okla., and its Vidriocar subsidiary in Juarez, Mexico.

“This announcement is another solid sign of progress for our North American Way Forward plan,” said Mark Fields, Ford’s president of The Americas. “The successful approach Ford is taking with our component operations – including selling or idling our ACH facilities – will help us achieve our commitment to reduce overall operating costs by $5 billion by the end of 2008.”

“We aggressively are pursuing our strategy and we are very pleased with the response from the marketplace,” said Al Ver, ACH CEO and COO and Ford Motor Company vice president. “Recent improvement in the quality, delivery and cost-effectiveness of our operations has surprised some buyers.”

The Converca I Plant also produces propshafts, stabilizer bars and steering components. The production of stabilizer bars is scheduled to end late this year and ACH is considering options for the steering component and propshaft production.

Linamar Corporation is a diversified global manufacturing company with sales of $2.3 billion and about 11,000 employees and 36 manufacturing locations worldwide.

“The acquisition of ACH’s PTU manufacturing and product engineering capabilities, with leading-edge PTU technology, would significantly enhance the depth of our Transmission/Driveline Group,” said Linda Hasenfratz, Linamar’s CEO.

ACH is a temporary company established and managed by Ford to ensure the flow of quality components and systems while preparing the automotive component operations for sale or idling. Today, the $4 billion company and its 12 plants are supported by about 12,000 full-time employees, mostly leased from Visteon or Ford.