CADENCE INNOVATION
Magna subsidiary Decoma acquires all four European plants / US company close to being liquidated?
Decoma International (Concord, Ontario / Canada; www.decoma.com), a subsidiary of Canadian automotive OEM supplier Magna International (Aurora, Ontario; www.magnaint.com), has agreed to acquire the four central European plants of Cadence Innovation (Troy, Michigan / USA; www.cadenceinnovation.com), which is in Chapter 11 insolvency proceedings – see Plasteurope.com of 28.08.2008. A purchase price has not been disclosed, and the transaction is still subject to regulatory approval.
Included in the deal are three plants in the Czech Republic and a joint venture in Hungary, employing 2,000 people altogether. The acquisition will strengthen the company’s position in central Europe,” said Magna’s co-chief executive Siegfried Wolf. He added that the takeover of the plants, which supply a number of European and Asian OEMs including Skoda, will give the Canadian group access to an “interesting portfolio.”
Sales of the plants, which produce instrument panels, bumpers and cooler grills, totalled USD 369m in 2008. None of the European facilities is affected by the insolvency proceedings although – like most competitors – they, too, are feeling the effects of the downturn in the automotive industry. Some 300 employees at Liberec / Czech Republic have been laid off due to an order shortage.
With this latest buy, Magna continues to shift operations away from North America. At the beginning of December 2008, the company announced plans to close some of its US plants, due to the dwindling volume of new vehicles produced there – see Plasteurope.com of 09.12.2008.
The sale of the Cadence European plants fuels speculation that liquidation may be the next step for the US auto supplier, as it seems unlikely to be able to successfully reorganise and emerge from Chapter 11 on its own strength. Queries from Plasteurope.com to US headquarters as to the implications of the European sale have gone unanswered.
Cadence is currently being sued by GM to release the tooling the US automaker needs to produce parts for the revival model of its sporty “Camaro”, for which it claims to have 10,000 advance orders and already has delayed production by a month. GM had provided the equipment to Cadence to manufacture parts such as door trim, airbag covers and instrument panels prior to the bankruptcy, and US automotive journals say the supplier may be holding onto it in hope of being able to fulfil the contract. This is looking increasingly doubtful, however.
Included in the deal are three plants in the Czech Republic and a joint venture in Hungary, employing 2,000 people altogether. The acquisition will strengthen the company’s position in central Europe,” said Magna’s co-chief executive Siegfried Wolf. He added that the takeover of the plants, which supply a number of European and Asian OEMs including Skoda, will give the Canadian group access to an “interesting portfolio.”
Sales of the plants, which produce instrument panels, bumpers and cooler grills, totalled USD 369m in 2008. None of the European facilities is affected by the insolvency proceedings although – like most competitors – they, too, are feeling the effects of the downturn in the automotive industry. Some 300 employees at Liberec / Czech Republic have been laid off due to an order shortage.
With this latest buy, Magna continues to shift operations away from North America. At the beginning of December 2008, the company announced plans to close some of its US plants, due to the dwindling volume of new vehicles produced there – see Plasteurope.com of 09.12.2008.
The sale of the Cadence European plants fuels speculation that liquidation may be the next step for the US auto supplier, as it seems unlikely to be able to successfully reorganise and emerge from Chapter 11 on its own strength. Queries from Plasteurope.com to US headquarters as to the implications of the European sale have gone unanswered.
Cadence is currently being sued by GM to release the tooling the US automaker needs to produce parts for the revival model of its sporty “Camaro”, for which it claims to have 10,000 advance orders and already has delayed production by a month. GM had provided the equipment to Cadence to manufacture parts such as door trim, airbag covers and instrument panels prior to the bankruptcy, and US automotive journals say the supplier may be holding onto it in hope of being able to fulfil the contract. This is looking increasingly doubtful, however.
13.02.2009 Plasteurope.com [212817]
Published on 13.02.2009
German version of this article...