Midas and Arvin Announce Expansion of Strategic Alliance
30 July 1999
Midas and Arvin Announce Expansion of Strategic Alliance
ITASCA, Ill.--July 29, 1999--Midas, Inc., and Arvin Industries, Inc., today announced a significant expansion of their strategic alliance where they supply automotive components and products to each other.Under terms of the expanded alliance, Midas will increase its supply of certain exhaust components to Arvin Replacement Products of Loudon, Tenn., and Arvin will increase the quantity of exhaust product it supplies to Midas. Arvin currently supplies Midas with catalytic converters, suspension and filtration products.
"This is a win-win situation for both companies," said Wendel H. Province, Midas' chairman and chief executive officer.
"Midas is assured of a continuing supply of high quality exhaust products for its more than 2,100 Midas shops in North America and its independent wholesale customers," Province said. "Also, our exhaust product costs will be predictable in times of fluctuating demand for exhaust products."
Arvin Chairman, President and Chief Executive Officer V. William Hunt said, "We are delighted with this significant expansion of the strategic partnership between Arvin and Midas. We will be able to significantly increase the exhaust pipe volume at our Loudon, TN, plant and ensure that we are the cost and quality leader for all our customers. This alliance marks another significant milestone in our growth strategy which is based on growing with our existing customers. We now supply Midas with the full array of Arvin Replacement products, including exhaust, ride control, filters and catalytic converters. We look forward to growing with Midas," Hunt explained.
In conjunction with this expanded alliance, on October 1, 1999, Midas will close one of its two exhaust manufacturing plants. The plant to be closed, in Bedford Park, Ill., currently has 185 employees.
"It is never easy to close a production plant considering the impact on dedicated employees, their families and the community," Province said. "We believe the programs we are putting into place will make the transition easier for our employees."
Midas expects proceeds from the disposition of assets will cover plant closing costs. Financial terms of the expanded alliance between Midas and Arvin were not disclosed.
"Consolidation of exhaust manufacturing operations at our Hartford facility, together with an expanded strategic alliance with Arvin, will result in cost efficiencies and will further strengthen the Hartford operation, which is an industry leader in product quality and production efficiency," Province said.
"Rapidly changing conditions in the exhaust replacement market make it necessary for Midas to take this action now to keep our product costs competitive and to maintain profitability," Province said.
Midas is one of the world's largest providers of automotive service, including exhaust, brakes, steering and suspension services, as well as batteries and maintenance services. There are more than 2,700 franchised and licensed Midas locations in 20 countries, including more than 2,100 in North America.
NOTE: This news release contains certain forward-looking statements that are based on management's beliefs as well as assumptions made by and information currently available to management. Such statements are subject to risks and uncertainties, both known and unknown, that could cause actual results, performance or achievement to vary materially from those expressed or implied in forward-looking statements. Readers are cautioned not to put undue reliance on such forward-looking statements. The company may experience significant fluctuations in future results, performance or achievements due to a number of economic, competitive, governmental, technological or other factors. Additional information with respect to these and other factors which could materially affect the company and its operations are included in the company's filing with the Securities and Exchange Commission, including the company's 1998 annual report on Form 10-K.