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Automodular extends Ford deal to 2012


June 9, 2010
by PLANT STAFF

Automodular sub-assembles, sequences and delivers engines, suspension and instrument panel modules for several Ford vehicles built in Oakville, Ont., including the Ford Flex.

Photo: Ford Motor Co.

AJAX, Ont.: Automodular Corp. has firmed up its Ford Motor Co. business with a multi-year agreement that covers an extension of services at the automaker’s Oakville, Ont. operations.

Automodular sub-assembles, sequences and delivers engines, suspension and instrument panel modules for the Ford Edge, Ford Flex, Lincoln MKX and Lincoln MKT.

The Ajax, Ont.-based automotive parts supplier didn’t provide details about the value of the agreement but says it will end in 2012.

The company operates on a just-in-time basis. It typically receives orders as rapidly as every five seconds and completes an assembly within two hours of each order for delivery at the OEM’s plant precisely in time for installation.

The Ford agreement extension follows the loss of General Motors contracts in April when the automaker cancelled subassembly and sequencing services for the Camaro, produced at its Oshawa, Ont. plant. GM has awarded the business to Inteva Products, a Troy, Mich. auto parts supplier.

The contracts accounted for 20% of Automodular’s business and their loss contributed to a first quarter net loss of $200,000, although the results represent an improvement over a $1-million loss a year earlier.

Automodular said the cancellations occurred mid-way through the contracts and it intends to sue GM for $20 million. GM contends the contracts contained a provision that the supplier must remain competitive, and did not do so.

Company president and CEO Michael Blair said GM was demanding it cut prices in half.

As a result of the cancellation, Automodular is closing its Oshawa plant Sept. 21. Up to 100 jobs will be affected although the Canadian Auto Workers union said more than 70 workers would be picked up by Inteva Products when it sets up a plant in Canada.

Automodular currently employs 650 people and operates four plants in Canada and the US.
PLANT

With files from Canadian Press.