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Freudenberg-NOK sets lofty goal for Mexican operation

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Employees at Freudenberg-NOK's plant in  Queretaro, Mexico
Employees at Freudenberg-NOK's plant in Queretaro, Mexico, pose outside the facility. The company plans to boost capacity at the factory in the next two years.

QUERETARO, Mexico—Freudenberg-NOK Sealing Technologies GmbH & Co. has experienced growth after adding a new business line to its Queretaro plant. Now it has its sights set on a bigger goal: to increase capacity 400 percent by 2017.

The joint venture between Freudenberg & Co. K.G. and NOK Corp. transferred and expanded its portfolio of engine, transmission and driveline oil seals to supply several original equipment manufacturers in the region in 2014. Gary VanWambeke, general manager of the Global Transmission and Driveline Lead Center, said the firm has been winning a lot of new business in the country as a result.

“It's been a mix of products,” VanWambeke said. “We're growing with engine customers, but more so with transmission and driveline customers. We're seeing a significant shift to us because of some of the technology we offer to the customers.”

Freudenberg-NOK freed up capacity when it transferred some of its business to another company. The Queretaro plant is 56,000 square feet, and as of December, the firm has added 179 employees, projecting to add more as it moves toward its goal. In 2014, the company added 58 pieces of equipment and delivered 2.4 million parts.

“There is a lot of business expansion in Mexico, and it's a very competitive environment,” VanWambeke said. “The team down there has done a great job in creating the right culture. They spend a lot of time with the associates, making sure they understand the process and what they're trying to do. They give them a lot of opportunity for growth and a lot of training.”

He said Freudenberg-NOK has room to reach its capacity target, with room for more even beyond its 400-percent goal. Freudenberg-NOK said industry sources estimate that Mexico will pass Japan and Canada to become the top source of cars imported into the U.S.

Freudenberg-NOK plans to add molding and component capacity. VanWambeke said the facility is vertically integrated with rubber and metal stamping production on site.

“Mexico is very manufacturing friendly,” he said. “There is an international airport right in Queretaro. There are great technical schools there so the work force is very well educated. Our team does a lot of cross-training, and they're very receptive to learning. We're certifying a good number of the associates in lean systems and Six Sigma.”

VanWambeke stressed that Freudenberg-NOK's establishment of production in Mexico is in line with the firm's philosophy of producing components within the region it plans to serve.

The company said its Queretaro facility has become one of its fastest growing factories.

“For us, going to Mexico isn't a labor savings play; it's being where the customer is,” VanWambeke said. “The customers benefit because we have a lot shorter value streams. They don't have to ship from the U.S. into Mexico. They're getting it locally.”