ZF looks to increase U.S. capacity

With North American sales of chassis and transmission products scheduled to double by 2006, ZF Friedrichshafen AG is contemplating a new manufacturing plant and two factory expansions.

The plant is planned for Chicago’s south side and could be producing unspecified products by the end of 2004, said Bernd Habersack, president of ZF’s North American operations. He wouldn’t comment when asked if the customer is Ford Motor Co., but the automaker is revamping its Taurus plant on Chicago’s south side to include a nearby supplier park. ZF has established strong ties with Ford as the German supplier has expanded into North America.

ZF’s booked business in North America will double in the next five years, but the company’s manufacturing network can’t handle increased production demands.

“It needs additional factories; it needs additional activities,” Habersack said.

The planned investment in capacity was not revealed. But sales should rise from about $1.7 billion in 2001 to about $4.3 billion in 2006, executives said. Sales for 2001 are down slightly from plan and from 2000 revenue of $1.8 billion. The figures don’t include revenue from Sachs; it posted 2000 North American revenue of $400 million and was acquired recently by ZF.

ZF’s factories in Duncan, S.C., and Tuscaloosa, Ala., are under consideration for expansions as their major customers prepare for growth. ZF supplies BMW and other customers out of Duncan and Mercedes out of Tuscaloosa. Business associated with the Mercedes M class would be the driver of a Tuscaloosa expansion, Habersack said.

A ZF-controlled joint venture with Ford in Batavia, Ohio, also will boost volume as the venture’s main products, continuously variable transmissions, go on the market. The transmissions would fill existing capacity at that plant, which makes about 350,000 conventional transmissions. Executives expect Batavia’s transmission production to rise to 1 million by the end of the decade. ZF’s total North American transmission volume could go from about 400,000 units today to more than 1 million by 2007.

You can reach Amy Wilson at awilson@crain.com

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