Joint Venture Allows Meritor To Stop Making Transmissions
The 50-50 partnership, announced June 9 at the International Trucking Show, will result in a new company, ZF Meritor, which will produce medium- and heavy-duty transmissions for heavy vehicle original equipment manufacturers and the aftermarket in North America. A 60% interest in Meritor Clutch Co. is included in the deal.
The transaction is expected to close in July, pending regulatory approvals.
“The venture combines our marketing ability with ZF’s technological expertise,” said D. Mike Pennington, director of marketing communications for Meritor. “With this deal, Meritor exits the transmission business, placing all of this activity in the joint venture.”
ZF spokesman Wolfgang Schmidt said the German company was pursuing a strategy to expand its core businesses of components for “trucks, buses, passenger cars and construction and agricultural vehicles” in North America.
“We are eager to gain a foothold in North America and to be a global player — as we think we are,” he said.
In March, Lemforder Corp., a unit of ZF, announced plans to produce truck chassis and steering components at a new $10 million plant in Lancaster, S.C. Part of the strategy in building the factory included ZF selling its stake in O&S Manufacturing of Whitmore, Mich., which the company did in April to a minority investment group (3-15, p. 11).
Meritor’s 100-person sales department will manage sales and service of the products involved in the joint venture, which will include North American field operations and aftermarket teams.
ichard Martello, the former general manager of Meritor’s transmission, clutch and driveline business, was appointed president. The companies will each have three members on the board of directors, with the chairman’s position rotating between the two every three years. The chairmanship has not been filled yet.
ZF Meritor will be based in Laurinburg, N.C., where Meritor Clutch is located. Its 243,000-square-foot plant will be the manufacturing site for 9-, 10- and 13-speed transmissions and clutches for commercial vehicles.
In 1997, Meritor, based in Troy, Mich., was spun off from Rockwell Automotive, which had entered the heavy-duty transmission market in 1989. It has 16,000 employees who work at manufacturing and research facilities stretching from North America east to South Korea.
eritor consists of two businesses:
ul>
li>Heavy Vehicle Systems — a supplier of drive train systems and components for medium and heavy-duty trucks, trailers and off-highway equipment and specialty vehicles.
li>Light Vehicle Systems — a supplier of roof, door, access control, suspension and seat adjusting systems and wheels for passenger cars, light trucks and sport utility vehicles.
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he units reported sales of $3.83 billion in 1998, with 60% coming from international and export business.
ZF, based in Friedrichshafen, Germany, employs more than 35,000 people worldwide and has annual sales of $5.9 billion. More than half of its worldwide sales are from car and light truck parts and about 27% are from parts for commercial vehicles. The remainder is
enerated from agricultural, aviation, industrial and rail products.
The company has 11 of its 53 global production facilities based in the United States, where two divisions — ZF Industries and Lemforder — operate under the ZF Group. In addition to commercial vehicle transmissions, the divisions and their affiliates manufacture transmissions for cars, off-road and marine applications and other automotive parts.
ZF Friedrichshafen AG was founded in 1915 by Count Ferdinand von Zeppelin, as an adjunct to the business of constructing airships. The only stockholder is the Zeppelin Foundation.
