DETROIT - A German automotive supplier is preparing to use its new suburban Detroit headquarters for a global mission.
Hella North America Inc. unveiled a $22 million headquarters and manufacturing plant last week in Plymouth, Mich. But it is just the first phase of an ambitious expansion.
Hella established its U.S. operation two decades ago to supply parts for American-built Volks-wagens.
The company is now planning to build an undisclosed number of 200,000-square-foot automotive lighting and electronics plants in the United States, said Michael Buford, president of Hella and its manufacturing company, Hella Electronics Corp.
Buford said he is looking at sites in the Midwest and Southeast, but he gave no details.
The plans are the result of the crossroads Hella has reached in a joint venture it formed more than a decade ago with two Japanese companies. Negotiations to renew the contract among the partners - Hella's North American Lighting, which holds 50 percent of the venture, Koito Manufacturing Co., with 40 percent, and Ichikoh Industries Ltd., with 10 percent -are incomplete.
Buford said Hella now is limited in where it can market the automotive lighting products produced by the joint venture. 'We may have to create a separate entity, because the (venture) cannot serve a global role,' Buford said.
New plants would allow Hella to market outside North America. If the joint venture is continued, new business could be sent to the new plants, he said.
The joint venture had helped increase Hella's North American business by giving the company access to transplanted Japanese auto plants, said Walter Genthe, Buford's predecessor. Now, however, 'market conditions are different,' Buford said. 'Hella needs to consolidate under one ownership.'
Even without a new corporate entity, the company plans to continue its rapid growth. Buford said he expects Hella North America, which includes the electronics group, the joint venture and a manufacturing plant in Flora, Ill., to post sales of $500 million within a few years.
The company has grown at a 27 percent annual compounded rate since Genthe founded the company's North American operations 20 years ago next month. Hella got its start by supplying the now-defunct Volkswagen operation in Pennsyl-vania, said Genthe, who retired three years ago as president of Hella's U.S. companies.
Hella Electronics posted sales of $100 million last year, and its joint venture had combined sales of $280 million last year, Buford said. The company is owned by Hella KG of Germany.
Hella of North America is a original-equipment supplier to Big 3 and European automakers.
