Crain's Detroit Business
Four years ago, Progressive Tool & Industries Co. had said that the sale of the company was not an option, and that it would fight to remain independent.
But it has reversed course by agreeing to be sold to the Comau S.p.A. unit of Fiat S.p.A. for $630 million in cash and debt.
The move will create one of the world's largest automotive tool-and-die companies.
Progressive Tool said the deal was forced by automaker demands to globalize followed by the cultural clashes and costs of doing so. Progressive, already one of the largest manufacturers of the machines and equipment that build cars, has annual sales near $800 million. It has 4,700 employees.
Progressive's availability has been rumored for years as the privately held manufacturer of automotive assembly equipment grew and the auto-supplier industry underwent massive consolidation.
Progressive, of Southfield, Mich., is owned by the Wisne family, whose other holdings include Wisne Design in Royal Oak, Mich., and Wisne Technologies in Southfield, Mich. All were part of the sale, which is expected to close this month.
Progressive long had dismissed talk of its sale and kept a tight lid on any potential deal.
Lawrence Wisne, Progressive president and son of company founder Anthony Wisne, told Crain's Detroit Business in January 1995 that selling is 'not an option.' Anthony Wisne founded the company in 1939.
Bob Stoutenburg, Progressive executive vice president of global operations, said selling become an option the past few years as automakers such as Ford Motor Co. pushed more engineering responsibilities to suppliers while also expecting them to be global.
GO GLOBAL OR PERISH
'This is a time of mergers and acquisitions. You've got to be a global player, and you've got to be strong player if you're going to be any player at all,' said Stoutenburg.
The deal will create one of the world's largest car-production systems groups, with combined sales around $2 billion. The two companies have little overlap and seem to complement each other in geographic and customer markets.
For example, Progressive's top customers are the U.S. operations of automakers such as General Motors, DaimlerChrysler and Ford Motor Co.
Comau's include such European automakers as Fiat Auto S.p.A., Renault SA and Volkswagen AG.
Progressive has plants in Mexico and South Africa, while Comau does not. Comau has plants in Brazil and Italy, while Progressive does not. Comau also brings in the ability to build robots, something Progressive did not have.
'We become a well balanced company together. Their strength is in the U.S., while ours is in Europe,' said Paolo Vannini, Fiat Auto USA Inc. vice president of corporate communications.
Comau will pay $350 million in cash and take on $280 million in Progressive debt. Progressive's shareholders are family patriarch Anthony, brothers Larry, Joe and Alan and sister, Toni.
Comau North America Inc. is in Auburn Hills, Mich. It had sales last year of $60.2 million and has about 157 employees. Comau has total worldwide sales near $1 billion.
Progressive and Comau have been in talks since last year, said Jeff Sands, director of PriceWaterhouseCoopers Securities LLC. He said his firm was brought in last fall to help Progressive decide its future.
'We looked at more acquisitions, IPOs or whether we should be acquired,' Sands said. 'The company has already spent an enormous amount to get into Europe and were successful, but the demands were getting even greater. This is something that for (Progressive) was inevitable.'
LOOKING AT STAMPINGS
Among those potential projects may be plans to begin designing and producing stampings for vehicles. A source within Progressive said the company has such plans. Stoutenburg said he could not comment on production stampings, but added that's 'not to say never.'
The source within the company said Progressive was moving toward a position where it builds complete unpainted car-body skeletons, known as bodies in white, and ships them to car assembly plants for painting and final assembly.
To that, Stoutenburg said: 'It could be. It depends on customer demands.'
Sands of PriceWaterhouse-Coopers said the Progressive-Comau venture will be 'well-positioned to do the whole thing, delivering sheet metal, chassis, the underbody - the whole thing.'
Stoutenburg said he expected few changes in Progressive's management.
David Barkholz contributed to this report