Grede is the world’s largest independent producer of ferrous lost foam castings at its North American manufacturing center in Columbiana, AL.
Grede Holdings LLC has just completed buying two foundries in Mexico from Grupo Proeza. The transaction price paid by Grede was not disclosed for the NovoCast and Teknik foundries, both located near Monterrey. Grede is a privately held automotive, industrial and heavy truck supplier.
The latest move for one of leading makers of cast, machined and assembled suspension and brake components was an attempt to add capacity in the face of anticipated growth either later this year or next. Grede estimates annual revenues this year of $875 million, after posting a 42% sales increase in Q1 at $232 million.
Capacity or lack thereof at auto suppliers, who drastically downsized by closing facilities and jettisoning workers in 2008 and 2009 as the Great Recession took hold, is an emerging problem as auto and truck makers slowly recover and increase production.
The emerging industry problem is being compounded by the supply disruptions caused by the Japan earthquake and tsunami.
Just how much of a problem remains to be seen in what remains a very weak U.S. economy with low levels of consumer confidence and the highest unemployment and underemployment rates since the Great Depression.
“The acquisition of the NovoCast and Teknik foundries is important for Grede because it expands our manufacturing footprint to allow us to supply key automotive, heavy truck and industrial customers in Mexico with a broad spectrum of ductile and gray iron components,” said Doug Grimm, chairman, president & CEO of Grede.
Grede specializes in castings, including lost foam and high silicon molybdenum applications. Grede makes safety-critical components include brake adapters, caliper housings, anchor brackets, steering knuckles, control arms, wheel cylinders and valves.
Grede Holdings has 4,600 employees and operates 15 foundries and three machining operations in North America serving the transportation and industrial markets globally. Of the 15 foundries 12 are currently running at more than 90% of capacity, leaving little time for maintenance and repairs. Grimm says that he expects all the capacity to be used by the end of the year.
Honda, Ford, Jeep, American Axle, Mercedes, Freightliner, Navistar, Cummins, Caterpillar, Eaton, Deere and GE Wind are among Grede’s clients.
Grede Holdings was formed in 2010 through the combination of assets of the former Grede Foundries, Inc., Blackhawk Foundry (USA), and Citation Corporation after the companies were forced into bankruptcy.
Grede Holdings’ legacy dates back to 1920 when William J. Grede founded Grede Foundries, Inc. with an iron foundry in Wauwatosa, WI.
