just-auto.com

USA: Metaldyne to expand in Korea, divest in America

By just-auto.com editorial team | 1 November 2005

Metaldyne will expand its manufacturing operation in Pyeongtaek, South Korea.

The plant, which currently produces balance shaft modules for Hyundai, will expand to include powder metal connecting rod assemblies and front end modular assemblies.

Metaldyne will also add engineering resources in the region.

"Asia is a key growth area for Metaldyne," said chairman, president and CEO Tim Leuliette.  "Since the formation of the company in 2001, we have grown our business in Asia from less than 5% of our total sales to nearly 25% by 2010."

Separately, Metaldyne has retained Goldman, Sachs & Co. to explore a possible divestiture of its North American forging business which it regards as non-core and accounts for about 15% of the company's sales.

Metaldyne has instead built a business model on value- added products such as connecting rod assemblies, balance shaft modules, brake corner and transmission modules.

"Metaldyne has reported continued revenue increases and financial improvement through an otherwise sluggish automotive market," said Leuliette. "The divestiture of our non-core North American forging business would further strengthen our balance sheet and position [us] for additional core business expansion.

"As businesses and markets evolve, the forging industry is consolidating. While this business is attractive for forging specialists, it is not core to [us]."