DETROIT -- A unit of Ford Motor Co. and supplier Flex-N-Gate Corp. have terminated the proposed purchase of a plastics parts operation in Milan, Mich.
Flex-N-Gate had signed a memorandum of understanding to buy the Automotive Components Holdings LLC plant from Ford in December 2006, but was unable to complete the deal as economic conditions deteriorated in the industry. The companies canceled the agreement last month, ACH spokeswoman Della DiPietro said today.
ACH is a holding company of Ford Motor Co. and is made up of former parts plants that were spun off to Visteon Corp. in 2000, then handed back to Ford in 2005 with the intention to sell or close them. The Milan plant makes bumper fascia and fuel tanks. It currently employs 500 people, down from about 700 at the time Urbana, Ill.-based Flex-N-Gate proposed buying it.
ACH will continue making parts at Milan and will invest in production improvements until economic conditions improve and it can pursue a sale again, DiPietro said.
Milan marks the third plastics plant within ACH that failed to finalize a sale. In 2008 it terminated contracts to sell the Sandusky, Ohio, lighting plant to Meridian Automotive Systems Inc. and the Saline, Mich., interior parts plant to Johnson Controls Inc., both due in part to the deteriorating economy.
Like Milan, production and improvements have continued at both Saline and Sandusky, with plans to sell them along with a book of business when conditions improve, DiPietro said.