Ford announced today an agreement to sell the last of its Automotive Components Holdings (ACH) businesses, a divestiture that has been years in the making.
ACH's climate control business in Plymouth Township is being purchased by Detroit Thermal Systems (DTS), which is a new joint venture between French supplier Valeo and V. Johnson Enterprises, a Detroit supplier owned by former Piston basketball player Vincent Johnson.
The parties hope to transfer all assets and operations from the Sheldon Road plant to a new DTS facility in Romulus starting in mid-2013, to be completed by the end of 2014.
Production of climate control systems for Ford vehicles in North America is expected to start in the third quarter of 2013 and current ACH employees at the Sheldon Road plant can apply for jobs at the new DTS plant which wants a diverse workforce offering opportunities for minorities and military veterans.
"We are very proud to announce the creation of Detroit Thermal Systems. Our team is committed to manufacturing world-class climate control systems and to creating employment opportunities for the talented workforce in the Detroit area," said Johnson, chief executive officer of Detroit Thermal Systems.
"The growth of our new organization will help to revitalize local communities by creating new job opportunities for minorities, military veterans and others hard hit during the economic crisis," Johnson said.
ACH started in October 2005 with 17 components plants and now all will have been sold or closed. This is the 10th sale of ACH-managed operations.
Ford wanted to get out of the parts business to focus on its core business of building and selling cars, now down to two brands: Ford and Lincoln.
"Few companies take the longer-term, comprehensive approach we took with the restructuring of ACH," Mark Fields, Ford president of The Americas, said in a statement.
"From the start, our eye was on what was required to transform these operations into businesses that would attract the world's best suppliers needed to move Ford's business forward -- and at the same time, preserve as many jobs as possible. We are proud of what we accomplished," Fields said.
Ford and ACH have signed agreements to sell the Sheldon Road Plant to DTS. Finalizing the deal is contingent on approval of state and local incentives.
The sale also expands Ford's business with minority-owned suppliers. V. Johnson Enterprises has a controlling interest in DTS which intends to apply for certification as a minority business enterprise through the Michigan Minority Business Development Council.
"Detroit Thermal Systems will provide Ford with an experienced, high-quality climate control supplier and contribute significantly to the renaissance of manufacturing in the Detroit region," said Johnson.
"The combined capabilities of two world-class suppliers will provide customers with a capable, long-term partner, committed to support their needs today and for the future," Johnson said.
Valeo sees the deal as "a strategic breakthrough," that will strengthen its ties with Ford, said CEO Jacques Aschenbroich. It "also enhances our presence across North America," he said.
"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," Aschenbroich said.
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