Stoneridge, Inc. announced that it has executed an agreement to manufacture certain electronic products for its largest customer, Navistar, in a new facility located in Ramos Arizpe, Mexico, near the city of Saltillo.
The new facility will allow Stoneridge to further support and strengthen its relationship with Navistar by producing critical components in a highly cost-efficient manner, as well as enable the company to more competitively bid on other customer projects over the next two to three years. The company also expects to utilize this new leased facility, which is approximately 145,000 square feet, for additional production requirements.
Plans call for production at the new facility to commence in August 2011 for certain wiring and instrument panel applications, with additional applications to be produced through the fourth quarter of 2011 and into the first quarter of 2012. Stoneridge expects costs associated with the start-up to reduce profitability in the second quarter through fourth quarter of 2011 by approximately $4.0 million to $5.0 million and expects capital expenditures to approximate $5.0 million to $6.0 million.
"We look forward to expanding our relationship as a trusted partner to Navistar as this project was an important consideration included in the five-year agreement we signed with Navistar in July of 2010," says John Corey, president and chief executive officer of Stoneridge. "Along with our new joint venture agreement in India, which we announced on April 19, this reflects our continued progress to broaden our global manufacturing presence and enhance our ability to meet the growing demand from our customers."