Today sees the ground-breaking ceremony for Hyundai’s first car assembly plant in the USA. It is sited in Montgomery, Alabama and represents an investment of $1 billion. The factory on the 1,600 acre site will employ 2,000 people and produce 300,000 saloons and SUVs a year by 2005. Alabama offered incentives of over $252 million to attract Hyundai and the Korean company joins Honda and Toyota as foreign car companies with plants in the state.
A double management buy-out of former Conti-owned tyre retailer National Tyre Service and wholesaler Viking International was announced today. The buy-outs, which were for an undisclosed sum, were led by Chairman and Chief Executive Alan Revie. The two companies will continue to trade as separate businesses, under the umbrella of a new holding company, Axle Group Holdings Limited. In addition to National and Viking, the group includes a property company.
ContiTechFluid, the business unit of tyre producer’s subsidiary ContiTech, has recently purchased 51 percent of shares of Chinese hose producer Grand Ocean (Chang Chun). From January 2002 the 100 employees will produce parts for VW models Jetta and Bora and the Audi A6. The project in the north of China requires an investment by ContiTech of up to five million euro.
Tenneco Automotive has officially opened a new factory in Gliwice, Poland, to supply shock absorbers to European-based vehicle manufacturers. The facility is 21,000 square metres in area and will make six million units annually by the year 2005, eventually employing 120 staff. Tenneco says that the $20 million investment is the latest stage in the company’s strategy to expand in Eastern Europe.
Until today, the German Berliner Reifenwerke GmbH has been an example of the incompetence of authorities, banks and others. NEUE REIFENZEITUNG has already reported developments in detail, up to the appointment of the official receiver. Part of around 80 million Deutschmarks, which were originally supposed to build up Berliner Reifenwerke, have either been thrown away or squandered in order to support the lifestyles of some company leaders, and of which the creditors are unlikely to see a penny again. But things are not so bad, because the investment bank “Berliner Investitionsbank” has already managed other flops. The truly sad thing is that loyal employees of many years’ standing have been dismissed, and they are now without jobs or prospects. The fact that Berliner Reifenwerke – today called Berliner Runderneuerungswerke –, is still alive, can be attributed to both the official receiver and the RuLa shareholders’ delegates. Berliner Runderneuerungs GmbH was founded by RuLa and, because time is short, the plant is being leased from the official receiver, but for the moment this factory will stay in mothballs. Although the huge pressure of time has been relieved, conclusive decisions are needed for the medium-term, as the whole plant cannot be leased for a long term if the contractual partner is an official receiver. Soon, investors will run off.
On January 24, SITA Tyre Recycling Ltd., the company running the whole-tyres-to-energy power station which has been closed since June, pleaded guilty at Wolverhampton Magistrates court to five environmental offences. The case was brought by the Environment Agency and SITA were fined a total of £28,500, and ordered to pay costs of £15,392.50. Meanwhile, the SITA tyres-to-energy power station (formerly Elm Energy), based in the midlands in the UK, is unlikely to open its doors again as a tyre-burning facility, at least under SITA ownership. Initial investigations indicated that rectification work would cost 4 million Pounds and a closer examination revised this figure to 6 million. There were doubts too that a viable price could be achieved for a regular supply of tyres. Eventually, the decision was taken to mothball the plant until SITA either finds a buyer, or uses it for something else. 59 of the 60 employees have been made redundant.
Hankook Tires has recently completed the construction of its new European Distribution Centre at Rotterdam, enabling the tyre manufacturer to improve its service to customers throughout Europe. The EDC – a 10 million Euro investment – was officially opened on 7th March.
Tenneco Automotive has acquired a plant in Gliwice, south-west Poland, to produce shock absorbers for OE manufacturers based in Europe. The investment is $20 million and involves refurbishing the site and installation of new equipment. Production is scheduled to begin in the third quarter of this year. Richard Sloan, MD of Tenneco Automotive Europe, said that the low labour and operating costs, plus special investment conditions in the Katowice Special Economic Zone, made the decision to come to Poland “straightforward”.
Over the next five years, Continental will invest just over $51 million in its Continental Teves brake factory, located at Jicin in the Czech Republic. The investment will mean that the factory is amongst Europe’s largest brake system manufacturers and will mean another 670 jobs to the 900 already employed at the plant.
According to articles in German newspapers the negotiations between the US-Investment company and Continental for the purchase of ContiTech have hit a snag. It is said that Carlyle is not willing to pay the price that Continental expects. According to spokesmen from Continental the group is now negotiating with more than one potential partner.
Tenneco Automotive is spending one million Pounds (1.6 m Euro) on a refurbishment programme at its Walker exhaust manufacturing factory at Tyseley, Birmingham in the UK. The investment will improve flexibility and reduce downtime between manufacturing different products. The factory produces two million exhausts a year.
HelabaTrust (the investment and research subsidiary of Landesbank Thueringen-Hessen) believes that Continental could be a candidate for a takeover. Reasons given are the enormous debts of 3.6 bn Euro and the weak level of the shares.
DaimlerChrysler have said that they regard the nine billion Dollar law suit by its third largest shareholder, the Tracinda Investment Group, as completely unfounded. The lawsuit alleges that DaimlerChrysler have deliberately deceived the US Stock Exchange Control Institution as well as the shareholders. Analysts predict that this law suit has little chance of success. Although Deutsche Bank, the main shareholder of DaimlerChrysler, have demonstratively supported the management, the car manufacturer’s share price went down significantly to 45.85 Euros.
London-PowerGen CHP Ltd is to construct a new £40million combined heat and power (CHP) plant at Michelin’s UK manufacturing site in Stoke-on-Trent. The building of the site is viewed by Michelin as a vote of confidence in the plant, which is at present shredding 473 jobs from its 2700 workforce. It is anticipated that the CHP plant will be operational by the end of 2001 and will meet Michelin’s energy requirement for at least 15 years, under a long term energy supply agreement.
Hayes Lemmerz International, one of the world’s leading suppliers of wheels, brakes, powertrain, suspension, structural and other lightweight components to the automotive and commercial highway markets, has announced that its Board of Directors has approved the repurchase of up to an aggregate of $30 million of its outstanding Common Stock. “Based on current market prices, our stock is at a historical low and we believe that the repurchase program is a good investment of available funds,” said Ron Cucuz, Hayes CEO and Chairman of the Board.
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