When the furnaces of Brembo North America's new iron foundry in Homer, Mich., fired up for the first time and poured a test batch of molten metal, it marked a rebirth of sorts for the beleaguered U.S. metal-casting industry.
After decades of bankruptcies, shutdowns and consolidations, the industry is growing again. At a time when North America's automakers are setting production records, suppliers are investing in a batch of new heavy-duty manufacturing facilities to ease bottlenecks.
- In April, Brembo opened its new $100 million foundry with a test pour. The foundry will supply its brake plant next door.
- In February, GF Linamar, a joint venture of GF Automotive and Linamar Corp., announced plans to build a $217 million metal die-casting plant in Mills River, N.C. That plant will employ about 350 people making powertrain parts.
- In December, German parts maker Fritz Winter North America disclosed plans to build a $194 million foundry in Franklin, Ky. That venture will employ 343 people.
- Last August, Kamtek said it would spend $530 million to expand its foundry in Birmingham, Ala., and hire 354 additional workers to produce aluminum components.
The expansions follow a long, difficult consolidation. This year, 1,961 metal-casting facilities are doing business in the United States, down from 2,336 a decade ago, according to the American Foundry Society.
"There has definitely been a consolidation, followed by a resurgence in the last few years," says Al Spada, the industry group's vice president of business development.
"The auto industry's rebirth has placed an increasingly heavy demand on the casting market."In an industry populated by small, family-run businesses, the big suppliers are starting to assert themselves in the field. Kamtek, for example, is a subsidiary of Magna International Inc.
Brembo, with annual sales of $2.4 billion, fits this pattern.
As Europe's economy stagnates, North America has become the biggest market for the Italian brake supplier, which produces rotors, drums, calipers and other components for Fiat Chrysler Automobiles, Ford and General Motors.
"There has definitely been a consolidation, followed by a resurgence in the last few years. The auto industry's rebirth has placed an increasingly heavy demand on the casting market."
Brembo vertically integrated its production by opening its own foundries in Europe and Asia, while its North American unit relied on outside suppliers. That was causing some nervousness, says Dan Sandberg, CEO of Brembo North America.
"Customers were very concerned about the supply base," Sandberg says. "The supply base was contracting as our demand grew. We saw nothing but risk that prices would go up."
Sandberg says he's not worried that Brembo might be making a big investment at a time when North American production might have topped out. That's because the foundry can't supply more than half of the brake plant's needs, Sandberg says.
"We'll be running this foundry 24 hours a day," he says, "which means I should have a pretty profitable foundry."