Automotive castings producer will consider mergers, acquisitions, and joint ventures
Fort Worth, TX (USA) - Intermet Corp. reports it secured $130 million of annualized new and replacement business during 2007, which will result in more than $537 million in total revenue for the automotive castings group, Fort Worth-based Intermet said revenue for the multi-year programs will be spread across its three operating groups: Ferrous, Die Cast, and Pressure-Counter Pressure Casting.
“We’re delighted with these new business wins and the growing trust of our OEM and Tier One customers,” states president and CEO Jeff Mihalic. “This validates our strategic direction and our successful execution of lean manufacturing principles throughout the company. In addition, this new business gives us the opportunity to add to our already strong track record of on-time product launches, which generates even more sales momentum.”
Intermet relates the new business to a series of organizational changes that have been instituted over the past two years, “strategic initiatives” it says have “re-focused and re-energized the company,” making it financially sound and growing in its presence serving automotive, commercial-vehicle, and industrial markets.
The initiatives included forming an advisory board to guide organizational development, reorganizing the corporation around three business units, reducing corporate overhead, selling off Intermet’s European operation, “rebuilding” product cost models, consolidating capacity, and implementing Six Sigma and Lean manufacturing initiatives.
The Lean manufacturing effort, which is coordinated under a program called the Intermet Production System (IPS), is called “the single biggest driver of Intermet’s financial improvement.” The critical metrics of the IPS include safety, customer quality, equipment uptime, cycle time, productivity, and delivery, which are tracked and posted at each plant.
Intermet reveals that its company-wide labor productivity has improved by 14%, and projects that overall cycle times will decline by 20% this year. It says that 100% of the Intermet workforce has been exposed to the IPS, and that by the end of this year every employee will have participated in at least one Lean event.
“We have made great progress with the implementation of our key strategic initiatives in a very short period of time as is evident in our ability to capture new business,” Mihalic states. He added that Intermet’s customers have had very positive reactions to the initiatives, particularly to the improvements in operations and pricing. “
Finally, Intermet reports it has begun an assessment of its core capabilities, areas for growth, competition, and industry capacity, and that the executive team is in the process of “focusing the company’s assets and capabilities where they best support growth areas and customer requirements.” Mihalic stated that, as the business and plan are evaluated, future actions could include mergers, acquisitions and joint ventures.
“Given the current trends in the automotive industry and the economic climate in general, we believe it is only prudent to seek opportunities for intelligent consolidation of capacity,” according to Mihalic.