Core Materials Corporation (Amex: CME) announced today that it has reached an agreement with Lear Corporation (NYSE: LEA), one of the world’s largest automotive suppliers, to supply sheet molding composite (SMC) products for three new sport utility/ pick up truck models.
This agreement with Lear, a Tier I automotive supplier, includes manufacturing of fiberglass reinforced molded products to be used on three new hybrid sport utility/pick up truck models to be introduced by an automotive original equipment manufacturer. Core Materials will produce SMC seat bottoms and seat backs for these vehicles. The products manufactured by Core Materials will be shipped to Lear Corporation, which will produce full seat assemblies for the automotive original equipment manufacturer.
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Core Materials’ estimated revenues, based on planning volumes released by the automotive original equipment manufacturer and Lear Corporation, would approach $25 million annually at peak levels, however volumes are not guaranteed. Production of two of the models is expected to begin in early 2001 with the third model starting later that year.
“This is a major piece of new business for Core Materials as it enables us to aggressively compete for market share in the structural end of the automotive market and strategically expand our customer base,” said James L. Simonton, president and chief executive officer, Core Materials. “We’re very excited about entering this new market and working with an industry giant such as Lear Corporation.” Lear Corporation (NYSE: LEA – news), a Fortune 150 company is headquartered in Southfield, Michigan and had sales in 1999 in excess of $12 billion.
Management stated that the company is also examining facility alternatives as production levels ramp up in 2001. Alternatives include the use of existing facilities, as well as the development of new operations.
Core Materials’ management is extremely pleased with the addition of Lear to the company’s customer base as it represents further progress towards meeting Core Materials’ aggressive diversification plan. Currently, Core Materials’ notable customers include: International Truck and Engine Corporation (formerly known as Navistar International Transportation Corporation), Yamaha Motor Manufacturing Corporation, Volvo Trucks North America Inc. and New Holland North America.
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By GlobalDataThe Lear agreement is further proof of the automotive and trucking industry’s acceptance of SMC. “SMC is an ideal material for this type of structural application,” Simonton said. “Its high strength-to-weight ratio and flexible design features contribute to the SUV’s overall innovative design features and decreased weight.”
Core Materials Corporation (Amex: CME) is a compounder and compression molder of sheet molding composites (SMC). The company produces high quality fiberglass reinforced, molded products and SMC materials for varied markets, including transportation, marine, agricultural and commercial and industrial products. Core Materials, with its headquarters in Columbus, Ohio, operates plants in Columbus and Gaffney, South Carolina.
