Wisconsin Manufacturing News

With news from Orion Energy Systems, Cherry Corp., WMEP, Grede and Magnetek.

Orion Energy Systems expanding in Manitowoc
Orion Energy Systems Inc. plans to expand its manufacturing capacity and is planning a $13 million project to construct and equip a new headquarters facility near its current facility in Manitowoc, the state Department of Commerce announced. The state is providing $854,500 in tax credits to the company to assist the expansion, which will create 170 new jobs and help retain 115 jobs. The company designs and manufactures and implements energy management systems, consisting primarily of energy-efficient lighting systems for commercial customers.

"Energy efficient lighting systems are a great way to conserve energy and decrease facility costs," said Gov. Jim Doyle. "I am pleased that we could assist Orion Energy Systems with this project that will help the company double its current number of employees. This expansion is not only good for Manitowoc, but it will also allow more energy-saving products to reach the market."

The tax credit "demonstrates Wisconsin’s ongoing commitment to improving the quality and quantity of employment opportunities in Wisconsin communities, and will further position Orion to aggressively grow our business, provide quality jobs and promote energy efficiency," said Neal Verfuerth, Orion Energy Systems president and CEO.

German firm to acquire Cherry Corp.
Cherry Corp., which operates its global and North American headquarters in Pleasant Prairie, will be acquired by ZF Friedrichshafen AG of Germany. The German firm is expanding its worldwide automotive supplier position for driveline and chassis technology.

Cherry’s corporate headquarters has seven employees, and its nearby North American headquarters has about 140 employees working in sales, administration and design, according to Dan King, the company’s vice president of finance and administration.

Most of Cherry’s manufacturing is in Germany, where it employs half of its 3,100 employees. Its North American manufacturing is based in Mexico, where it employs about 650 workers, King said. Cherry will operate as an independent business unit of ZF, and no jobs will be lost in Pleasant Prairie, said Frank Buschemi, a spokesman with ZF. The company’s name will change to ZF Electronics GMBH, but the Cherry brand name will remain for non-automotive parts. In 2007, Cherry had sales of approximately $ 400 million with 3,100 employees worldwide.

Cherry was founded in 1953 and develops as well as produces switches, sensors, control units, and electronics modules for the automotive industry, components for industrial and household applications, and computer input devices.

Peter Cherry, chairman and president of Cherry said, "This transaction has great strategic value; as it will allow Cherry to expand its current customer base and ZF will bring substantial additional resources for future growth in all of Cherry’s product segments. There are many opportunities for incorporating Cherry’s technologies into the broad range of ZF applications."

"With ZF Electronics, we are reinforcing our competence profile in the fields of mechatronics and electronics" said Hans-Georg Harter, ZF’s chief executive officer and president. "In particular for our future tasks in driveline and chassis technology, we can swiftly apply Cherry’s know-how." Financial terms of the transaction were not disclosed.

State manufacturing group reports $226 million economic impact
The Wisconsin Manufacturing Extension Partnership (WMEP), a nonprofit organization dedicated to growing manufacturing companies in the state, announced last week that it produced a $226 million positive impact on the state’s manufacturers during its fiscal 2008.

The majority of WMEP’s impact was in increased sales and business expansion, a report by the group states. The report is based on 185 surveys filled out by companies that WMEP assisted. Those companies reported $128 million in increased and retained sales, $16.9 million in cost savings, $81.3 million worth of expansion and new equipment purchases, and 1,235 created and retained jobs.

Manufacturers in southeastern Wisconsin reported a $70 million impact from WMEP’s efforts, with 293 jobs retained or created, $50 million in increased and retained sales and $16 million in new investment.

"Many manufacturers are investing in new technology and expanding their plants to accommodate increased demand for products and services from customers here and around the globe," said Michael Klonsinski, executive director of WMEP. "This year’s impact sends a strong message about the substantial gains that can be realized by manufacturers who invest in change and transformation. Clearly it’s another sign that Wisconsin manufacturers can compete and win in the global economy."

During the past five years, WMEP says manufacturers it has assisted have reported an impact of $931 million with 8,635 jobs created/retained. For more information, visit www.wmep.org.

Grede lands Daimler contract, but lays off workers
Milwaukee-based Grede Foundries Inc. has secured a $45 million order to produce heavy truck axle castings for export to Daimler Truck’s assembly plants in Germany, but the company still is laying off employees. Those castings would be made at Grede’s plants in Reedsburg, Wis.; New Castle, Ind.; and St. Cloud, Minn.

Grede said it also anticipates finalizing another $20 million in sales to European customers in the coming weeks. "The opportunity to export profitably couldn’t come at a better time," said Bruce Jacobs, president and chief executive officer of Grede. "The market is extremely difficult for the foundry industry as we try to manage volatile costs and reduced demand. The new Daimler work will help fill open capacity at our plants in Wisconsin, Indiana and Minnesota, and our hope is that additional export work fills some of the gaps at our other plants."

Like many other manufacturers, Grede has experienced rapid global increase in the costs of its raw materials and energy. Those costs have jumped approximately 40 percent in recent months, while domestic demand for foundry products has dipped by about 25 percent, Jacobs said.

"It’s been a difficult time for everyone in our industry," he said. "While our company has been able to remain financially stable amid market swings, it hasn’t been easy and it’s involved difficult decisions to curtail some operations and employment. Europe – due in part to the favorable current exchange rates and a shortage of foundry capacity there – represents an important opportunity for Grede Foundries.”

Huppert Engineering of Biedenkopf, Germany, has been retained to supplement Grede’s England-based sales office to service the new Daimler account and pursue additional European export opportunities, Jacobs said.

Despite the additional orders, Grede is continuing to lay off employees. Grede will lay off 90 employees at one of its production lines in Reedsburg. The company also laid off 80 employees in April.

Magnetek acquires Saminco product line
Magnetek Inc., a Menomonee Falls-based designer and manufacturer of power control and delivery systems for the overhead material handling industry, has acquired the DDC Direct DC Drive product line from Saminco Inc. and the associated DDC technology, patent and intellectual property rights from co-owners Eaton Corp. and Saminco.

Magnetek had a brand label supply agreement with Eaton since 2006 to provide sales, support and service of direct DC drive systems, marketed under Magnetek’s OmniPulse brand name, to the material handling industry.

The crane control systems are used in DC-powered primary metal, foundry and heavy industrial cranes.

"Replacing traditional electromechanical controls with digital DC drive technology results in a combined energy and maintenance savings that easily justifies the return on investment," said Perry Pabich, vice president and general manager of Magnetek’s material handling business.

"The acquisition of the DDC digital drive product line and technology provides Magnetek with a unique addition to our controls product portfolio and gives us greater presence in the international crane control market, as the DDC product line has an established distribution network in Europe and South America," Pabich said. Saminco is based in Fort Myers, Fla., and Eaton is based in Cleveland, Ohio.

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