DETROIT -- Over the past five years, the American operation of Kolbenschmidt Pierburg AG has grown from three employees to 32. Now the German engine parts supplier says it is weighing a variety of expansion options in the United States.
The company is filling three more engineering slots, said Paul Klapproth, director of communications and marketing.
And Kolbenschmidt Pierburg has outgrown its suburban Detroit office and is planning to build an office and research center in metro Detroit or South Carolina that could employ up to 200 people, Klapproth said.
Kolbenschmidt Pierburg's growth and expansion plans stand in contrast to the layoffs and plant closings of some U.S.-based suppliers. It is not alone. This month Hella North America, MBtech North America, Behr America Inc. and Continental AG also announced expansions.
Kim Korth, president of IRN Inc. in Grand Rapids, Mich., says a number of German automotive suppliers came to North America over the past 15 years either to service DaimlerChrysler after Daimler-Benz AG bought Chrysler Corp., or to support BMW's production plant in South Carolina.
Struggle is over
Then, after struggling for a few years to land contracts with additional customers, many German suppliers adjusted and began gaining ground, Korth says.
The reasons for success vary, he says, but include the increased appetite of the domestic automakers for the latest technology; the willingness of German suppliers to adapt their products and prices to fit the tastes of North American customers; and changing market demands.
Kolbenschmidt Pierburg, for example, makes diesel-engine parts at a time when U.S. demand for diesel engines is expected to increase because of higher gasoline prices.
On April 5, Gerd Kleinert, chairman of Kolbenschmidt Pierburg's management board, said expansion options under consideration include developing 12.5 acres the company owns in Auburn Hills, Mich.; purchasing additional land in the Detroit area for the building; or locating the center in Fountain Inn, S.C.
Kolbenschmidt Pierburg has 175 manufacturing and engineering employees in Fountain Inn in its assembly division and its pistons divisions.
"They are there, but our customers are here," Klapproth says, referring to Michigan.
Even if Kolbenschmidt Pierburg picks another state, maintaining a significant engineering and sales presence in the Detroit area will remain a priority because it is important to remain close to potential customers, says Udo Nenning, a member of Pierburg GmbH's management board.
MBtech North America, with an office in Troy, Mich., also is hiring engineers in that state, says CEO Knut Konzelmann. MBtech has about 130 employees throughout North America and is filling an additional 35 positions in Troy, Konzelmann says.
Konzelmann is MBtech's first North American CEO. His appointment was announced April 3.
MBtech is an automotive engineering and consulting company formed in 1995 as a wholly owned subsidiary of DaimlerChrysler. The company purchased a proving ground in Laredo, Texas, in 1998. It opened its first North American headquarters last July.
Eager to expand in U.S.
While MBtech serves DaimlerChrysler divisions, clients also include Mitsubishi, Nissan and Volks-
wagen. Konzelmann is confident the company can gain business in the United States.
Already, about 40 percent of MBtech's $236 million in annual sales come from customers other than DaimlerChrysler, Konzelmann says.
Meanwhile, German lighting and electronics manufacturer Hella North America is also gaining market share in the United States. Hella opened its U.S. headquarters in Plymouth, Mich., 10 years ago and employs about 240 people there.
Now Hella is planning to hire an additional 50 engineers over the next six to 12 months, says Raymund Heinen, president of Hella North America.
Some of those employees are needed because of new business from General Motors and Ford Motor Co. for exterior lighting.
Other German suppliers have been busy, too:
- Behr America of Troy said April 3 that it will add an $8.5 million, three-story office building that it expects will open early next year.
- Continental AG, whose North American automotive headquarters is in Auburn Hills, said April 3 that it had reached an agreement to acquire Motorola Inc.'s automotive electronics business for about $1 billion in cash.