European suppliers seize new U.S. opportunities

Mubea's expansion of its Kentucky operations enables the company to cut weight from metal parts. The supplier introduced the process a decade ago in Germany but found little U.S. interest until recently.
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European supplier investment in the United States is stirring as new-car sales increase and automakers push supply chains for ways to boost fuel economy.

European parts makers have a chance to expand their North American business in the coming years, supplying technologies they may have perfected in Europe to meet fuel economy regulations there, says Doug Cain, CEO of Mubea North America, the U.S. arm of the privately owned German supplier of springs and metal components.

"I believe you'll be seeing new opportunity developing here for German and European companies, now that the U.S. market is rebounding like it is," Cain says, "even from the Asian OEMs who are expanding in North America."

Mubea’s Cain: New U.S. desire for fuel economy

Cain just opened a $60 million expansion of Mubea's operations in Florence, Ky., that illustrates the opportunity. The new plant, which is six stories high and longer than two football fields, is a continuous flexible rolling mill that can vary the thickness of a coil of steel to multiple specifications.

That means that a single metal component can be produced in multiple thicknesses, allowing for as much as one-fifth of its weight to be eliminated.

Mubea introduced the process nearly a decade ago in Germany, but found North American customers uninterested in weight reduction for fuel economy, Cain says. But surging U.S. interest in fuel efficiency prompted Mubea to move ahead, building the plant in just 18 months.

"In Europe, it has been an easy sell for the past several years to spend a little more to take weight out of the vehicle," Cain says. "That hasn't been the business case here until recently."

At the same time, Swiss plastics supplier Rehau Inc. has launched two expansions in Cullman, Ala. The first, which is under way, is a $115 million bumper line to supply rising volume at its local customer, Mercedes-Benz U.S. International. The second, which is to start construction in the spring, is a U.S. r&d center focused on helping customers innovate components.

"We have 20 engineers working in trailers here at the moment," says Albert von Pelser, plant manager of Rehau Automotive's Cullman operations. When finished, the r&d center will employ about 140 people.

"Our role will be changing. Customers need us to be more involved as our products become more sophisticated. Our parent company in Europe sees this as a new opportunity for us."

Rehau has developed a bumper technology that combines steel with plastic for a lighter-weight module, von Pelser says. Mercedes plans to incorporate it onto the next-generation C-class car and M-class crossover.

Bolta Werke, a German producer of plated and coated plastic parts that is part of the Purico Group of the United Kingdom, is also spending $39.5 million to build its first U.S. plant. The Tuscaloosa, Ala., factory will employ 350 supplying parts to Mercedes, Volkswagen and Rehau, starting in 2016.

You can reach Lindsay Chappell at lchappell@crain.com.


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