Hyundai Motor Co. is turning to a trusted Korean supplier to pick up the pieces after the collapse of a deal with a U.S. supplier.
Hyundai Mobis will take over most of the $150 million in component work that would have gone to Venture Industries LLC.
Hyundai Mobis is the automaker's largest supplier.
Financially troubled Venture, a Fraser, Mich., supplier of body panels and interior trim, failed to arrange financing for a parts factory for Hyundai.
For months last year, Hyundai tried to force Venture to give up the contract so the automaker's $1 billion auto assembly construction project in Montgomery, Ala., could stay on schedule.
Hyundai's new deal keeps the project on schedule. The plan requires Mobis' fledgling U.S. subsidiary, Mobis Alabama LLC, to double the size of a $30 million parts plant it planned in Montgomery, says Bill Lang, spokesman for Hyundai Motor Manufacturing Alabama. He says the Mobis Alabama operation will need about 550 more workers than the 430 originally planned.
Mobis has annual sales of about $2.5 billion. The Alabama project is its first foray into U.S. manufacturing. The contract is to produce cockpits, instrument panels, and front and rear corner modules for 300,000 Hyundai Sonata sedans and Santa Fe SUVs a year. Production will start in March 2005.
Some other small parts of the Venture contract will be divided among other companies, Lang says. Details have not been completed.
Hyundai has tried to embrace more North American suppliers as it opens its first U.S. auto plant. Venture was one of several chosen last year, but it filed for Chapter 11 bankruptcy shortly after winning the business.
The deal would have required Venture to construct a $100-million parts factory in Alabama, where it would have employed 600 people producing body panels, instrument panels and other parts.