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Metaldyne Corporation Business report FY2006
Business Highlights
Acquisition by Asahi Tech of Japan
In January 2007, the Company said the acquisition by Asahi Tec Corporation
has been completed. Asahi Tec is a Shizuoka, Japan-based chassis
and powertrain component supplier in the passenger car/light truck
and medium/heavy truck segments. The total value of the transaction
is approximately USD $1.2 billion.
In March 2007, Asahi Tec Corp. announced initiatives to expedite
the integration of its Metaldyne subsidiary, consolidate the corporate
management structure and reduce operating costs. The company expects
these actions, along with the recent announcement of plant closings
and executive retirements, to result in a net savings of more than
$10 million in fiscal 2007. Asahi Tech will continue to focus on
balancing assets with the changing global market opportunities and
the company's expanding Asian businesses. This consolidation of
corporate functions comes just 10 weeks after the merger was completed
in early January 2007. Asahi Tec also completed a successful equity
issuance in early March 2007 whereby new investors from Southeast
Asia and Europe contributed more than $70 million of new equity.
This equity round was the second part of a planned three-phase restructuring
of the Asahi Tec/Metaldyne capital structure which included the
initial merger transaction, the equity issuance and a contemplated
debt refinancing of the combined companies.
Contracts
In November 2006, the Company announced it has been awarded a contract
from an Asian automaker to supply integrated balance shaft/oil pump
modules. The program, valued at approximately $40 million annually,
will launch in 2008 to produce balance shaft/oil pump modules for
diesel engines that power passenger cars and SUVs. The Metaldyne
module is designed with proprietary gear, shaft and oil pump technologies
to create a smoother driving experience. Metaldyne's unique gear
technology meshes with the crankshaft gear to eliminate unwanted
noise. The oil pump is integrated into the module to provide lubrication
to the entire engine, offering additional noise, vibration and harshness
(NVH) benefits. The housing architecture significantly reduces the
size of the module, minimizing packaging space claim and improving
power consumption. By incorporating the oil pump into the balance
shaft module, Metaldyne helps the customer meet future emission
requirements.
In December 2006, the Company announced it has been awarded a contract
from an Asian automaker to supply damper isolation pulleys. The
program, valued at approximately $12 million annually, will launch
in 2008 to produce damper isolation pulleys for diesel engines that
power passenger cars and SUVs. Metaldyne's unique damper isolation
pulley reduces cost, weight, and complexity, while improving noise,
vibration and harshness (NVH) characteristics for a quiet ride.
In February 2007, the Company announced it has been awarded a $70
million contract from a global automaker to supply chassis products
for multiple 2007-2008 model-year car and truck platforms. The first
program is currently in production in the United States; the second
begins production in Mexico later in 2007; and, a third launches
in China in 2008. Metaldyne will supply front and rear knuckle assemblies
and front lower control arm assemblies that reduce cost, weight
and complexity, and improve noise, vibration and harshness (NVH).
Divestitures
In January 2006, the Company announced that it has entered into
an asset purchase agreement with Forming Technologies, Inc. related
to the acquisition of Metaldyne's North American Forging business.
The Company's North American Forging business includes the operations
as currently being conducted at its Royal Oak, Fraser, Detroit,
and Troy, Michigan; Canal Fulton and Minerva, Ohio; and Fort Wayne,
Indiana facilities. As conditioned upon the terms of the agreement,
a transaction may close sometime in the first quarter of 2006.
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