Ford and Meridian Automotive Systems have announced a memorandum of understanding (MOU), outlining a framework for the sale of Automotive Components Holdings’ lighting business and its Sandusky, Ohio plant.
ACH Sandusky primarily makes automotive lighting, including front, rear and signal lights, for some Ford vehicles, and about 60% of Ford’s North American vehicle production.
“This announcement represents more progress with our Way Forward plan,” said Ford’s president of The Americas Mark Fields. “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 $US5bn by the end of 2008.”
Other ACH businesses in negotiations for final agreement and sale include glass, fascias and fuel tanks, climate control systems, propshafts, and power transfer units (PTU).
The ACH fuel rail business and its El Jarudo subsidiary were sold at the end of the first quarter.
“The response from the marketplace has been better than expected,” said ACH CEO and COO Al Ver.
“We believe that is due, in large measure, to the significant improvement in the quality, on-time delivery and cost-effectiveness of our operations during the past year and a half.”
Automotive Components Holdings is a temporary company managed by Ford, which was established in October 2005 with former Visteon component operations. ACH’s mission is to ensure the flow of components and systems while preparing the ACH component operations for sale or closing.
The $4bn firm currently has 12 plants and about 12,000 full-time workers, mostly leased from Visteon or Ford.
“Acquiring the Sandusky, Ohio facility is a logical extension of our engineering and manufacturing expertise in lighting,” said Meridian’s president and CEO Richard Newsted.
“We are excited about the opportunity to improve the long-term competitive position of this operation and expand our strengths and capabilities in lighting technology.”
The sale is contingent upon reaching a new and competitive agreement with the United Auto Workers union, both companies noted.