PRUDNIK, Poland—Henniges Automotive Holdings Inc. will open its first manufacturing plant in Poland later this year.
The firm has secured a refurbished 47,500-sq.-ft. building in Prudnik, which Chief Operating Officer Larry Rollins said will be complete in September and then begin production in October. Henniges plans to add business gradually as the operation grows and has secured additional land to expand the building if necessary. The operation also consists of 19,400 square feet of warehouse space.
Initially the facility will employ 120, a figure that likely will balloon to 250 within the first 18 months, Rollins said. However, the firm projects the operation to employ 500 in five years.
It will be the company's third manufacturing facility in Europe, joining plants in Rehburg, Germany, and Hranice, Czech Republic. The firm also operates technical centers in Mlada Boleslav, Czech Republic; Viersen, Germany; Rehburg; and Munich, which also is the firm's European headquarters.
Henniges is a global provider of sealing and anti-vibration components for the automotive market.
“We're taking a very strategic approach with how we ramp this up to protect our customers and to also ensure we have our people properly trained and that we have the right product mix in there for the community and the building to support that,” Rollins said. “We've been very detailed about how we want to do this.”
Larry Williams, president and chief financial officer, said local government is providing the refurbishment of the building, with Henniges investing in the equipment to manufacture product. However, initially there will be equipment moving over from its Rehburg facility to allow that plant to relocate some outsourced production under its roof.
When Prudnik starts to launch the new business, which Williams projects to be at the end of 2017 at the earliest, Henniges will begin investing in additional equipment.
The new facility is about 93 miles north of its manufacturing operation in Hranice. A wire harness manufacturer previously used the building. Rollins said local government has refurbished the building completely with a new roof, parking lot and infrastructure specifically for Henniges.
“That was one of the things that attracted us to this city in Poland,” Williams said. “There was a prior company that was in the facility, so there's already a work force there that we could tap into as we start to ramp up and re-hire. It gives us the ability to support a city in Poland that was struggling from an economic standpoint. We can help them, and they can help us.”
Rollins said Henniges recruited the former plant manager to come work for the firm, and that has allowed it to tap into some of the engineering talent in the area.
“They already know a lot of people in the community,” Rollins said. “If you look at it from my perspective, it's a win-win for the community and for us.”
Prudnik will serve the entire European market. Rollins said the facility was necessary to make Henniges' cost structure more competitive in order to continue to grow its business in the region. He added the location allows it to draw technical talent from Poland and the Czech Republic.
“I think the European automotive market is at this point stable,” Williams said. “We don't see significant growth in the market, but we see it being stable, and there's opportunity for us. There's a little bit of excess capacity in the market, and so it's holding prices down. But we do see an opportunity to gain some market share in the region as we continue to expand.”
Europe is facing some uncertainty with the United Kingdom's recent vote to leave the European Union. However, Williams said the decision shouldn't significantly affect Henniges' business.
“We don't see it impacting us directly,” Williams said of Brexit. “The only impact we would see is through the OEMs if they alter any of their manufacturing or production plants as a result of Brexit. Ford has some exposure there with their engine plant being in the U.K., but as far as our product, we don't ship anything into the U.K. So unless there is some movement by the OEMs, we don't see any impact on our business.”
Headquartered in Auburn Hills, Mich., Henniges employs 7,700 worldwide with facilities in all four major regions of the world. It is a subsidiary of China-based Aviation Industry Corp.