It is official, DC to sell NVG

[TboneMan]

Magna to buy new venture gear
Tuesday, May 18, 2004
By Charley Hannagan
Staff writer
DaimlerChrysler has agreed to sell its New Venture Gear division for about $435 million to Canadian auto parts maker Magna International Inc.
Magna and DaimlerChrysler have created a joint venture to acquire New Venture Gear's U.S. facilities, which include the 1.8 million-square-foot plant in DeWitt and offices in Troy, Mich.
Magna will own 80 percent of the joint venture, with DaimlerChrysler owning the remaining 20 percent of the new company called New Process Gear Inc. Magna expects to acquire the remaining interest in the new company in September 2007.
Magna will acquire New Venture Gear's German operations outright.
The futures of 3,600 local New Process Gear workers and their families depended on Monday's deal. Auto analysts estimated the DeWitt plant would close within three years if DaimlerChrysler could not find a buyer for it.
Magna officials spoke with New Process Gear workers last week about the company's organization and its plans for the plant.
The deal is subject to government and third-party approvals. It also depends on Magna's ability to reach a satisfactory contract with the United Auto Workers. UAW Locals 624 and 2149 represent production and office workers at the DeWitt plant.
The two sides hope to win approvals from all parties in two to four months, said Mary Gauthier, speaking for DaimlerChrysler.
New Venture Gear had sales of about $1.5 billion last year. It is a leading supplier of transfer cases and other drivetrain products in North America. It makes parts for DaimlerChrysler, Ford, General Motors and others.
"This transaction is an important step in establishing our newly formed Magna Drivetrain group as a leading global supplier of technologically advanced four-wheel and all-wheel drive systems," said Frank Stronach, Magna's chairman and interim president and chief executive officer.
Although the terms of the deal are confidential, DaimlerChrysler and Magna have a supply agreement through 2011, Gauthier said.
DaimlerChrysler President and Chief Executive Officer Dieter Zetsche said the agreement makes "good business and good 0
people sense."
It allows DaimlerChrysler to focus on its core business of creating and building cars and trucks, he said.
"In addition, our relationship with Magna will provide us with access to the latest drivetrain technology, while providing opportunities for employment with a leading global enterprise," Zetsche said.
The agreement puts the one-time rivals for General Motors' truck parts business into the same company.
New Process Gear had that business until last year, when Magna won the General Motors contract to make truck parts beginning in the 2007 model year. The loss would have cost the NPG plant about 1,000 jobs.
But Magna doesn't have enough capacity at its plants; it needed to build a plant or to buy one to fulfill the contract.
DaimlerChrysler has long said it wanted to exit the component parts business to concentrate instead on design and assembly of cars and trucks.
It told the UAW during contract talks in the fall that it wanted to close, sell or operate as joint ventures nine component plants, including New Process Gear.
The UAW agreed not to block the company's plans to sell a stake in New Process Gear. In return, workers will receive wages and benefits according to the contract between the union and DaimlerChrysler.
Magna is a diversified automotive supplier. It designs, develops and makes automotive systems, assemblies, modules and components. The company also engineers and assembles vehicles for its customers.
The company employs 75,000 in 212 manufacturing plants and 47 product development and engineering centers in 23 countries.