Freudenberg-NOK, Meiji and Mitsubishi Establish Joint Venture
3 August 1999
Freudenberg-NOK, Meiji and Mitsubishi Establish Joint Venture - Flexitech, Inc. - to Supply Brake Hose, Other Hose Assemblies
PLYMOUTH, Mich., Aug. 2 -- After recently announcing its
intention to enter the North American brake hose market, Freudenberg-NOK has
solidified its commitment by signing an agreement this week to enter into MMU
Auto-Components, Inc., an existing joint venture between Meiji Rubber &
Chemical Co., Ltd. and Mitsubishi Corp., both of Japan. The new company,
named Flexitech, Inc., will supply brake hose and other hose assemblies for
the North American market.
Flexitech -- which is 51 percent owned by Freudenberg-NOK, 29.4 percent by
Meiji and 19.6 percent by Mitsubishi Corp. -- offers brake hose assemblies, as
well as power steering, vacuum, oil cooler and automatic transmission hose
assemblies. Current customers include Mitsubishi Motor Manufacturing of
America, Honda of America, and Subaru-Isuzu Automotive.
This new joint venture integrates the sales, marketing and engineering
resources established earlier this year by Freudenberg-NOK with the North
American production operations of the existing joint venture established in
1989 between Meiji and Mitsubishi Corp. Sales in 1999 for the new company are
expected to exceed $8 million.
John S. VanAlstyne, currently Freudenberg-NOK's vice president and general
manager of New Business Development, will also serve as president of
Flexitech. Yoichi Furuya, MMU Auto-Components' executive vice president and
plant manager, will retain his position at Flexitech.
"Flexitech uniquely offers current and future customers world-class rubber
hose and final assembly capabilities, as well as unmatched value in terms of
product cost and performance," VanAlstyne said. "We plan to become a major
player in the North American market and -- adding to the global reach of
Freudenberg and Meiji -- enhance our position as a worldwide leader in brake
hose and other hose assemblies."
Flexitech partners will invest more than $400,000 for prototype and
testing equipment to support the establishment of local development
activities, with all equipment expected to be in place by January 2000 at
Flexitech's North American engineering facility co-located in Freudenberg-
NOK's Concept Center in Plymouth, Mich. The company has already invested in
engineering, sales and marketing resources. Engineering for MMU Auto-
Components was originally supported by Meiji in Japan.
According to VanAlstyne, Flexitech will leverage Freudenberg's and Meiji's
world-class expertise in high-quality rubber hose production by importing hose
from their existing operations in France and Japan. Final assembly will be
conducted at the existing 12,000-square-foot production site in Normal, Ill.,
which will be operated by Flexitech.
Freudenberg-NOK's global partner -- Freudenberg & Co. of Germany -- and
Meiji have worked together through a technical agreement for more than 20
years. The companies have been in the brake hose business for a combined
total of 75 years, with combined operations forming the third largest
manufacturer of brake hose assemblies in the world. The companies are both
fully integrated hose producers with assembly operations in France, Italy,
Netherlands, Spain, Turkey, Japan and Malaysia.
Freudenberg already has an estimated 30 percent share of the European
market and Meiji has a similar position in Japan -- significant positions and
customer relationships that Flexitech will build upon to obtain a similar
status in North America.
"Freudenberg-NOK's successful relationships with the domestic and new
American automotive manufacturers, the recent nomination by a global OEM for
$21 million in brake hose business, best-in-class technical capabilities,
strong global synergy and portfolio fit, lean systems expertise and our long-
standing relationship with Meiji, all work to further strengthen our ability
to establish Flexitech as a leader in the North American hose market,"
VanAlstyne said.
With operations in Japan, Southeast Asia and North America, Tokyo-based
Meiji Rubber & Chemical Co., Ltd. was established in 1900. A fully integrated
producer of high- and low-pressure rubber hoses and hose assemblies, including
brake, automatic transmission, vacuum brake, vapor, power steering and fuel
hoses, the company provides a wide range of automotive, industrial, electrical
and environmental science applications. Annual sales are nearly $200 million.
Plymouth, Mich.-based Freudenberg-NOK is part of the Freudenberg and NOK
Group Companies, which have total annual sales of more than $6 billion. With
global automotive sales of approximately $3.5 billion, the Freudenberg and NOK
Group ranks among the world's top 20 automotive suppliers and is one of only
eight in the top 100 that has global balance in each of the three major
automotive markets -- Asia, Europe and North America.
Through a global network of facilities spanning 24 countries with some
23,000 automotive employees worldwide, the supplier group offers its
automotive customers globally integrated products, including sealing packages
for transmissions, engines, brakes, axles and steering, NVH (noise, vibration
and harshness) components and packages, and all rubber, plastic and PTFE
components for suspension, electrical and fuel systems.
The Freudenberg and NOK Group also offers an extensive portfolio of
precision-molded products for the aerospace, appliance, business machine,
fluid power, marine, medical, off-highway equipment and recreational vehicle
markets. For more information, visit the Freudenberg-NOK web site at
http://www.freudenberg-nok.com .