Strattec Security Corp. plans to build a facility in Leon, Mexico for the production of car door handles as part of an ongoing joint venture with ADAC Automotive.
Frank Krejci, Strattec president and chief executive officer, said the plant is scheduled to be operational by early 2017.
“Strategically, several automotive OEM’s are making significant investments in mid-Mexico including our current and potential future customer’s,” Krejci said. “We are excited and confident that building a door handle painting facility in Mexico will fuel our growth in sales and profitability in the future.”
The Milwaukee-based maker of automotive components has a 333,000-square-foot facility in Milwaukee that houses its corporate headquarters along with engineering and manufacturing operations. The company has three facilities in Juarez, Mexico that total 310,000 square feet. There is also a distribution facility in El Paso, Texas and an office in Auburn Hills, Mich.
Krejci’s announcement today came as the company was reporting earnings for its second quarter. The company reported a 25 percent drop in net income during the second quarter to $5.2 million and diluted earnings per share of 93 cents compared to $1.58 the previous year.
Strattec had revenue of $102.5 million in the quarter, up $500,000 from the previous year. For the six months ending Dec. 27, the company’s revenue was down just over 11 percent from $224.2 million to $199 million.
Krejci said the company expected the comparison to the prior year would not be favorable. In the prior year, the company had $34 million in incremental service parts sales to General Motors to support a recall. He added that expenses involved in diversifying and growing the business impacted profitability.
In the most recent quarter, Strattec had $31.8 million sales to Fiat Chrysler, a $1 million decrease attributed to lower volume. Sales to General Motors were down $3 million to $20.7. The decrease was driven by not having $6 million in sales from the recall. Sales to Ford were up $2.5 million to $14.1 million, driven by locksets and latches for F-150 pickup trucks. Sales to Hyundai and Kia were up $800,000 to $8.7 million, driven by components for Kia Sedona minivans.
