DETROIT - Adding assembly to its arsenal, Cambridge Indus-tries Inc. has formed a joint venture with minority-owned supplier Mexican Industries of Michigan Inc. to make automotive interior systems at a new plant here.
The companies will build a 100,000-square-foot injection-molding and assembly plant in Detroit's Empowerment Zone, a designated industrial area that offers tax and business incentives.
The factory will employ more than 200 when it reaches full capacity in the fall of 1999, said Pat Pavelka, president of Cambridge's interiors division.
The new plant, scheduled to open in December, has about $60 million in business initially with General Motors to assemble parts for several upcoming car lines, said Mexi-can Industries President James Merkhofer. The companies are discussing future projects with other carmakers, he added.
The companies have invested more than $10 million initially in building, land and equipment, Merkhofer said. The companies have not selected a name for the joint venture, of which Mexican Industries owns 52 percent.
Plastic parts supplier Cam-bridge, based in Madison Heights, Mich., and Detroit-based Mexican Industries signed the agreement May 28. The companies had discussed the possible coupling for more than a year and began the new plant this spring, Pavelka said.
Cambridge had previously used Mexican Industries to help assemble its interior parts.
'We looked at the organization and how best to grow both sides of the business,' Pavelka said. 'For our situation, they add a tremendous amount of expertise in assembly and cut-and-sew operations. (It) has a track record in that, whereas we're primarily a molder.'
The agreement is one of the larger partnerships, in expected plant size and work force, between a major plastic parts supplier and a smaller, minority-owned company.
MORE JOINT VENTURES
Several other projects are upcoming, including a joint venture between plastic fuel-system supplier Walbro Corp. of Cass City, Mich., and two minority partners. The group is investing $65 million in a new, 150,000-square-foot blow-molding plant scheduled to open in July in the Empowerment Zone.
Plymouth, Mich.-based Johnson Controls Inc., another large interior supplier, is seeking a minority partner for a new, 70,000-square-foot plant it plans to build in the Empowerment Zone.
GM, Ford Motor Co. and Chrysler Corp. want to generate 5 percent of their North American purchases from minority-owned companies by 2000. No automaker is currently at that level.
Collectively, those carmakers do $5.8 billion annually in business with minority-owned companies, said Ray Jensen, Ford's director of minority supplier development, at a news briefing last month in Detroit. The companies would like to increase that total by $3 billion in three years, Jensen said.
'I think you're going to see more of these as time goes on,' said Ford spokesman Ron Iori in a telephone interview from his Dearborn, Mich., office. 'We want strong, healthy, viable minority suppliers. In general, I think partnerships like that help both minority suppliers and us.'
Mexican Industries, which was founded by former Detroit Tiger pitcher Hank Aguirre, has Hispanic ownership. About 90 percent of its 1,500 employees come from the minority community, Merkhofer said. The company, now headed by Aguirre's daughter Pamela, assembles leather-wrapped steering wheels, tire covers and automotive soft trim at eight other plants.
EMPHASIS ON SYSTEMS
'The auto industry wants to buy systems instead of parts. Now we have the ability to make substrate systems by forming an alliance,' Merkhofer said.
The supplier, which expects to record $176 million in 1998 sales, also is part of a joint venture with Collins & Aikman Plastics Inc. of Troy, Mich., to make and assemble instrument panels for GM vehicles. The companies are building a 40,000-square-foot assembly plant in Detroit's Empowerment Zone due to open this fall.
The Cambridge joint venture will help both companies develop a strong molding and assembly base, said Paul Von Jankowsky, director of marketing communications for Cambridge.