Seven months after buying US fuel system supplier Walbro Corp., TI Group Automotive Systems has brought discipline and a new contract to the company.
Walbro has been awarded a major fuel system contract by General Motors for cars built off its new Epsilon platform, say supplier sources familiar with the program. The contract could be worth up to $175 million in annual sales. The first cars are due to appear in the 2003 model year.
The global contract is a major coup for Walbro. The Auburn Hills, Michigan, supplier had been slowed by management and profitability issues before the TI Group takeover last June.
Those problems were also recognized by TI Group plc, an Abingdon, England, conglomerate with $2.2 billion in 1999 sales for its automotive systems unit.
But the company wanted a leading fuel system company to marry TI-owned Bundy Group, a Warren, Michigan, maker of vehicle fluid-carrying systems.
With TI Group's financial discipline and operating know-how, the company believed those problems could be fixed easily, said James Davis, president of TI Group's North American Operations. Walbro recorded worldwide sales of $677.9 million in 1998.
The proof of TI Group's strategy is in the contracts. The Epsilon contract includes the Opel/Vauxhall Vectra in Europe and the Chevrolet Malibu, Oldsmobile Alero, Pontiac Grand Am and Saturn L series in the USA.
Davis said Walbro will make plastic fuel tanks, pumps and fuel lines under the contract.