US carmaker Ford Motor Co said yesterday it has signed a memorandum of understanding (MOU) with a North American subsidiary of China's top spare parts supplier Wanxiang Group for the sale of its Automotive Components Holdings' pro-shaft business.
Neapco LLC, the Wanxiang affiliate based in Pottstown, Pennsylvania, is to buy the pro-shaft operations from an Automotive Components Holdings (ACH) plant in Monroe, Michigan, Ford said in a statement.
The MOU said only one-fifth of the plant's production capacity would be required.
The plant, opened in 1929, produces drive shafts and half-shafts as well as other driveline products and catalytic converters.
Both Ford and ACH didn't reveal how much Neapco would pay for the pro-shaft business.
"This fourth MOU for an ACH business demonstrates that the ACH strategy is working," said AI Ver, ACH's chief executive officer.
The company earlier signed three MOUs with US spare parts makers Cooper-Standard Automotive Inc and Flex-N-Gate and France's Valeo SA to sell other parts of its businesses.
The MOU with Ford is the latest move made by Wanxiang, based in East China's Zhejiang Province, to branch out in the overseas market.
Robert Hawkey, Neapco's president, said in the statement: "Acquiring the Monroe pro-shaft business is a natural extension of our strategy of providing top quality driveline technology at world-class costs coupled with local engineering, assembly and logistics management."
Wanxiang has bought 10 overseas companies in the auto parts industry since it forayed into the US market in the 1980s.
Last August, the group's Chairman Lu Guanqiu told China Daily that it was in talks with the bankrupt US parts maker Delphi to buy part of its businesses. But no deals have been reached so far.
Zhang Xin, an auto industry analyst with Guotai & Jun'an Securities Co in Beijing, said yesterday there would be many acquisition opportunities in the United States for Chinese companies, as Ford, General Motors and Chrysler are likely to spin off more non-core businesses to cut costs. "But most important is whether they can get what they really need and assimilate the acquired know-how to improve their own competitiveness," Zhang said.
(China Daily April 5, 2007)