Ford and Neapco have signed a memorandum of understanding (MOU) for the sale of Automotive Components Holdings’ (ACH) propshaft business.
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The MOU announced on Monday is the fourth for Ford-owned ACH and another step forward in the unit’s plan to find new homes for its business units formed after their transfer from former owner Visteon in 2005.
Neapco, a North American affiliate of the Wanxiang Group, a top 100 company in China, signed the MOU for production of propshafts, currently produced at ACH’s Monroe plant.
The proposed operation would require a facility one-fifth the size of the current plant and a search for a smaller facility to house the propshaft operations is under way.
The Monroe plant currently produces driveshafts, halfshafts, other driveline products and catalytic converters. Most of the plant’s workforce of 1,200 is comprised of salaried employees leased from Visteon and UAW hourly employees leased from Ford.
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By GlobalData“This fourth MOU for an ACH business demonstrates that the ACH strategy is working,” said Al Ver, CEO and COO, Automotive Components Holdings, and Ford vice president. “We are using a number of creative approaches to transition our businesses and people to new owners, including moving to a ‘green field’ site if necessary.”
The Monroe plant opened in 1929 and throughout its history has been home to several heavy manufacturing operations.
“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 president and CEO. “Resources from the Wanxiang Group,… one of the world’s strongest and fastest growing suppliers to the automotive industry, provide us with a unique advantage.”
The deal is contingent upon a new agreement with the UAW – and state and local incentives, Ford noted in a statement.
Neapco, headquartered in Pottstown, Pennsylvania, supplies drivelines, steering shafts and components for OEM and aftermarket automotive, truck, agricultural, off-highway and specialty vehicle applications from its facilities in Pennsylvania, Nebraska and Mexico.
