Fuel and brake is one of Cooper Standard's four core product lines, joining sealing and trim, fluid transfer/premium hose systems, and anti-vibration systems. AMI's business helps strengthen that position in China while consolidating its position as one of the leaders in the North American market.
AMI founded its fuel and brake business in 2008, while the firm's core business consists of products for automotive powertrain applications. Since then, Stephenson said the unit has grown significantly to the point where it expanded into China in 2013 and grew to two plants.
The firms have signed and closed the North American part of the deal and are waiting for the formal approval processes to occur with the Chinese government. Stephenson added the companies don't anticipate any issues and estimated it would close within 60 to 90 days.
If approved, Cooper Standard would operate 15 manufacturing sites in China. About 250 employees—125 in In-di-ana and 125 in China—will transfer with the plants. Stephenson said up to 75 more could be transferred as Cooper Standard relocates the rest of AMI's fuel and brake business into other existing facilities.
“We looked at this as a business that's an easy tuck-under for the Cooper Standard organization,” he said. “It's part of our core product line and a business that we had thought executed well. It's something we think we can integrate quickly into our organization.”
Cooper Standard's Chinese unit produces about $500 million in sales, but Stephenson said the goal is to grow that figure to $1 billion before the end of the decade. The bulk of Cooper Standard's business in China is in sealing products. However, the company has made a number of investments in the last two years to grow its fuel and brake and premium hose/fluid transfer presence in the region.
“This really helps accelerate our growth in the fuel and brake business,” he said. “We've been a small player, but we're investing heavily now in facilities and capabilities. This just helps accelerate that growth by bringing us a book of business, bringing us a couple of facilities and bringing us some talented people.”
The company has made a number of other moves in China in the last two years. It established a technical center in Shanghai in 2014, including a test center for fluid transfer systems products; acquired majority ownership of its joint venture with China-based Huayu Automotive Systems Co. Ltd.; expanded the operational scale of fluid transfer and fuel and brake delivery product lines in Eastern China; and opened a new sealing facility in Northeast China.
More recently, it opened two facilities in early 2016—in Chongqing and Huai'an. The Chongqing site will produce fluid transfer systems, fuel and brake delivery systems, and sealing systems.
Its Huai'an facility will focus on low pressure premium hose lines and is the first under the company's joint venture with Japan's Inoac Corp., established in 2014 with Cooper Standard holding a 51 percent stake. Products for the joint venture are expected to include low pressure, premium hose and transmission oil cooler lines for radiator, emissions, vacuum brakes, turbo chargers, heater, air conditioning and power steering applications, Cooper Standard said.