Crain News Service
Charles Becker thought he was out of the automotive business last May when he sold his family-owned Becker Group to interiors giant Johnson Controls Inc.
Now he wants back in.
Becker is negotiating to repurchase at least five of his former plants and two tooling shops, according to sources close to the situation.
JCI paid $548 million for Becker's 51 North American and European factories and two tooling shops, and assumed $372 million of debt, according to JCI's annual report. Becker, of Sterling Heights, Mich., is a supplier of plastic trim. Sales were $1.3 billion in 1997.
Sources say Becker and other former officials of his company want to buy back several injection-molding facilities that produce trim and small interior parts, as well as the company's former tooling shops, Perfect Mold Co. and J.B. Rath Co.
'It makes sense that he would want the business back now,' said Dennis Virag of Automotive Consulting Group Inc. in Ann Arbor, Mich. 'He's an entrepreneur at heart.'
The transaction, if successful, would be a rare turn of events for an automotive supplier who has left the business. Even those who return seldom buy back their former plants.
Becker did not return phone calls to his Troy, Mich., offices, where he recently set up shop as Becker Ventures Inc. A Johnson Controls spokesman said his company does not comment on speculation involving sales or acquisitions.
Sources familiar with the negotiations say the sale could be completed in two to eight weeks. Several competitors speculated that Becker will become a parts supplier to Johnson Controls.
Becker's father, Leonard, started Becker Group in 1954 when he opened Perfect Mold. Charles and his brother, Bruce, built the company to world-class stature, competing with megasuppliers such as Lear Corp. and Johnson Controls.
But the company had $300 million in debts by the late 1990s. At a time when global suppliers were snapping up smaller companies, Becker seized the opportunity to sell.
SOME FOR SALE
Johnson Controls said in its annual report that it planned to sell several Becker operations this year that are outside JCI's core businesses. The report said consolidating Becker facilities would mean about 1,250 layoffs worldwide. At the time of last year's sale, Becker Group had 8,400 employees.
The auto industry should expect similar buyback deals, said Craig Fitzgerald, partner with investment house Plante & Moran LLP in Southfield, Mich. Large companies that make major purchases will find that some operations do not fit their long-term strategy, Fitzgerald said.