Valeo and V Johnson Enterprises have announced the formation of a joint venture called Detroit Thermal Systems (DTS) to acquire the climate control business of Ford’s Automotive Components Holdings (ACH), which is currently located within the Sheldon Road plant in Plymouth Township, Michigan. The Sheldon Road plant produces heating and air conditioning components and systems for a large number of Ford vehicles.
Ford and ACH signed definitive agreements with DTS for the sale of the business on 25 October 2012.
V Johnson Enterprises, an entity owned by Detroit entrepreneur Vincent Johnson, will hold 51% of DTS, while Valeo will hold the remaining 49%. DTS intends to apply for certification as a minority business enterprise through the Michigan Minority Business Development Council.
DTS will produce climate control systems and components for the automotive industry, including supporting current product supply commitments to Ford previously held by ACH. Ultimately, DTS is expected to employ approximately 500 people. Asset and operation transfers from the Sheldon Road Plant to a new DTS manufacturing facility in Romulus, Michigan, are expected to start in mid-2013 and conclude by the end of 2014.
The climate control business was part of Ford’s ACH which was formed in 2005 when Ford took back 17 plants from its former subsidiary Visteon with the intent of preparing each of the plants for sale.
Valeo has said the acquisition will give it a thermal systems leadership position in the North American market and strengthen its Thermal Systems operations and its position with Ford in North America and the rest of the world.
Jacques Aschenbroich, Chief Executive Officer of Valeo, commented: “This acquisition is a strategic breakthrough for Valeo that will not only enhance our presence across North America, but also strengthen our ties with the Ford Motor Company in North America and the rest of the world. Valeo will be a member of Ford’s Aligned Business Framework (ABF) supplier programme. This new joint venture will enable Valeo to broaden its offering of innovative thermal system products and support its customers in meeting their CO2 emissions reduction challenges.”
Valeo’s Thermal Systems business generated revenue of €808m (US$1.04bn) in Q3 2012, making it the largest of Valeo’s business units by sales. Revenue in the first three months of 2012 was €2,527m.
