When Spanish supplier Gestamp decided to enter North America, it needed a showcase for its hot-stamping technology.
It found one in Chattanooga. First, the company produced stamped components there for the Volkswagen Passat. Last year, it upped the ante when it announced plans for a $180 million expansion.
But the capacity continues to grow. In December, the original plant will launch a hot-stamping line. A second plant in Chattanooga produces body panels, and a third will manufacture chassis parts.
Jeff Wilson, CEO of Gestamp's North American and Asian units, says the expenditure is paying off. In 2020, the company expects North American sales will total $2.2 billion, up from $1.6 billion last year.
During a Sept. 14 interview with Staff Correspondent David Sedgwick, Wilson spelled out Gestamp's expansion plans.
Q: What did you mean last year when you said Chattanooga would be a beachhead for chassis products in North America?
A: The chassis business is critical technology for us. In 2010, we acquired Thyssen-Krupp's chassis unit. It gave us technology and manufacturing in Europe for high-tech chassis components. But in the U.S., we had not been able to initiate a program until Volkswagen's new SUV in Chattanooga.
In December, Gestamp's Chattanooga complex will launch a hot-stamping line. What are the prospects for hot stamping?
We have 13 hot-stamping lines in the United States, and our new line in Chattanooga will be our 14th. We have an additional five lines functioning in Mexico, with the sixth finishing installation now. It will primarily support Daimler. When you look at industry projections for production, hot stamping is a leading market for growth.
Are A-pillars, B-pillars and bumpers good candidates for hot-stamped products?
That's a good start. I would add front and rear rails. In some vehicles today, the structural cockpit is all hot stamped. The firewall, the front floor and the tunnel that houses the transmission are hot stamped.
What are Gestamp's three biggest customers in North America?
It would be Volkswagen, Daimler and Fiat Chrysler.
Which automakers make heavy use of hot-stamped parts?
All of them use it. We are doing a great deal of work with Honda. We have engineers and designers working closely with them. They are very dedicated to the technology. This year we launched our first Honda program -- the Civic. We did the A- and B-pillar, plus the front and rear rails. Honda is clearly moving forward with hot stamping.
Is Gestamp getting new contracts with the Detroit 3?
We will open a plant in Chelsea, Mich., for Ford's new Ranger. We'll do some chassis work for the Ranger, and we'll do the new Explorer. That will be a brand-new plant.
How much will it cost?
The first phase will be in the range of $50 million. We'll add a state-of-the-art press shop. Chelsea will produce control arms, predominantly for the Ranger. For the Explorer, we'll produce front subframes and links as well.
When will Chelsea launch production?
It will be in the first quarter of 2018. For the initial ramp-up, we'll have 150 employees.
Does Gestamp have any new projects with Fiat Chrysler?
We do. We are expanding our plant in Mason, Mich., to accommodate the new Dodge Ram. We'll introduce a single-piece door ring. That will be launched in 2018 as well.
You estimated Gestamp's North American capital budget at $350 million to $400 million this year. That's $100 million more than last year, right?
That's correct. Gestamp has committed a lot of capital to the region.
Will capital expenditures continue to grow next year?
Yes. In 2017, we'll increase our capital commitment for awarded business. For the immediate future, that will be our high-water mark.
Gestamp has made a number of acquisitions. Do you expect more?
I do. We are constantly looking for the right acquisitions -- especially for companies that make lightweight materials. That's clearly a target for us. We are being very selective, but I do see potential for acquisitions.
Are any acquisition announcements likely this year?
There is nothing on the radar, although there are a number of projects that we're working on.