Haldex announced the sale of its manufacturing plant in Paris, Tennessee, along with certain product lines manufactured there, to Setco Automotive Limited, Mumbai, India, for $4.9 million. However, the majority of the Paris plant's production has been transferred to other Haldex facilities.
The sale concludes the previously announced shutdown of the plant in Paris, TN, one of Commercial Vehicle Systems' North American plants. The plant had 120 employees and annual sales of approximately $32.7 million. The sale was effective December 31, 2006.
The sale to Setco includes buildings, machinery and certain non-strategic product lines. The product lines sold account for roughly $8.9 million in annual sales. These products include the Lipe clutch business as well as Midland hydraulic pressure converters and pressure boosters. The sale does not include Haldex's line of remanufactured clutch products. Customer notification will occur in the next few weeks for those product lines that will now be supplied by Setco. Haldex and Setco have executed various agreements in conjunction with the sale in order to assure continued supply and a smooth transition for customers of these product lines.
In announcing the sale, Joakim Olsson, CEO of Haldex, indicated that the sale "is an important step in our ongoing efforts to improve our cost structure by rationalizing our global manufacturing footprint and concentrating on our core Commercial Vehicle Systems air brake system product lines."
As the leading manufacturer of commercial vehicle clutches in India with global expansion plans, Setco provides an excellent strategic fit for the product lines sold by Haldex.