PARIS — The French auto supplier Valeo and American partner V. Johnson Enterprises LLC have formed a joint venture called Detroit Thermal Systems LLC to acquire the climate control business of Automotive Components Holdings currently located in its Sheldon Road plant in Plymouth Township.
DTS announced that it would move the production to a 365,000-square-foot plant at 6505 Cogswell St. in Romulus, pending approval of state and local incentives. Operational transfers are scheduled to begin in mid-2013 and conclude by the end of 2014.
Ford Motor Co. and ACH signed agreements with DTS for the sale of the business Oct. 25. V. Johnson Enterprises, owned by former Detroit Piston Vinnie Johnson, will hold 51 percent of DTS, while Valeo will hold the remaining 49 percent.
DTS will produce climate control systems and components for the automotive industry, including supporting current product supply commitments to Ford previously held by ACH. Ultimately, DTS is expected to employ approximately 500 people.
Valeo employs 73,800 people at 128 plants in 29 countries worldwide.
This announcement marks the fulfillment of the ACH strategy and the 10th ACH sale of an operation or plant. ACH was started in October 2005 with 17 automotive components plants.
“Few companies take the longer-term, comprehensive approach we took with the restructuring of ACH,” said Mark Fields, Ford president of The Americas. “From the start, our eye was on what was required to transform these operations into businesses that would attract the world’s best suppliers needed to move Ford’s business forward — and at the same time, preserve as many jobs as possible. We are proud of what we accomplished.”
The sale also expands Ford’s business with minority-owned suppliers. DTS intends to apply for certification as a minority business enterprise through the Michigan Minority Business Development Council.
“This acquisition is a strategic breakthrough for Valeo that will not only strengthen our ties with Ford Motor Company in North America and the rest of the world, but also enhance our presence across North America,” said Jacques Aschenbroich, Valeo CEO. “Valeo, in addition, will be a member of Ford’s Aligned Business Framework supplier program. This new joint venture will enable Valeo to broaden its offering of innovative thermal system products and support its customers in meeting their CO2 emissions reduction challenges.”
“We are very proud to announce the creation of Detroit Thermal Systems. Our team is committed to manufacturing world-class climate control systems and to creating employment opportunities for the talented workforce in the Detroit area,” said Johnson, chairman and CEO of Detroit Thermal Systems. “The growth of our new organization will help to revitalize local communities by creating new job opportunities for minorities, military veterans and others hard hit during the economic crisis.”
DTS will manufacture heating, ventilation and air conditioning units, initially for popular North American Ford vehicles, with future plans to develop offerings for new customers. The deal also gives DTS access to Valeo’s leading edge technology in HVAC modules, A/C systems and Powertrain Cooling Systems.
Current ACH employees at the Sheldon Road plant will be offered opportunities to apply for employment at DTS. The company said it is committed to promoting a diverse workforce by providing job opportunities for minorities and military veterans.
The DTS plant will be vertically integrated with in-house capability for manufacturing of components and assembly of complete HVAC modules. Included in the equipment line-up will be 30 precision injection molding presses to manufacture plastic components. The new plant will have the capacity to produce more than two million HVAC systems annually. The manufacturing systems will be designed to meet the automotive industry’s highest standards for efficiency and manufacturing quality. The plant will also be eco-friendly, with initiatives to minimize the use of energy and water, and to maximize the recycling of materials.