Metaldyne Divests Forging Business

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Metaldyne Corporation (Plymouth, Michigan) will sell the assets of its North American forging business to Forming Technologies Incorporated (Royal Oak, Michigan) for $129 million. The deal is expected to close in the first quarter of 2006.

Metaldyne’s forging operations include facilities in Royal Oak, Michigan; Fraser, Michigan; Detroit, Michigan; Troy, Michigan; Fort Wayne, Indiana; Canal Fulton, Ohio, and Minerva, Ohio. It was not immediately evident if the transaction would include Metaldyne’s Mexican facilities in Ramos Arizpe and Mexico City. The company’s forging division reported net sales of $345.1 million in 2004.

Click on the image at right to view the Metaldyne Plants Map.

Metaldyne, which has complained loudly in the past few years about rising metal prices, but that fact hasn’t, according to its 2002 10-K filing, seemed to affect the company’s profitability. The company has restructured and reorganized its operations from three segments into two, and has implemented performance-based compensation models and eliminated retiree health care benefits to increase profitability. In fact, the company is vigorously pursuing a course of setting up new plants in Asia, namely China and South Korea, not precisely because of higher SBQ prices in North America, but rather because of its substantial number of foreign OEMs, which is prefers to supply from plants in their own regions, in the interest of just-in-time delivery.

Metaldyne, a producer of chassis and drivetrain parts, was formed through the consolidation of MascoTech (a subsidiary of Masco Corporation), Simpson Industries, and Global Metal Technologies, and bought out by Heartland Industrial Partners in 2001. The company employs about 7500 workers in 45 facilities in 14 countries, and had 2004 sales of over $2 billion, ($1.5 billion in 2003).

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