Mitsubishi Steel to Acquire Remaining Share in US Sprig Making JV

Mitsubishi Steel Mfg announced on Thursday that the firm has reached a basic agreement to acquire 56% interest in Meritor Suspension Systems Company, a joint venture in United States between Mitsubishi Steel and Arvin Meritor to make automotive parts in U.S. As a result, MSSC becomes wholly owned subsidiary. Mitsubishi Steel shuts down MSSC’s Milton plant, one of two cites in Ontario, Canada to improve management bases.

Mitsubishi Steel expects North American automobile market would keep annual 10 million units of production in future despite of the current slump. The firm tries to improve the supply ability for major 3 markets including North America, China and Japan.

MSSC has another plant in Kentucky, U.S. in addition to Ontario based 2 plants. The revenue is about 17 billion yen per year. The annual productions are 5.2 million units of coil spring, 4.7 million units of stabilizer and 430,000 units of torsion bar. The firm is making loss under the very slow demand. However, Mitsubishi Steel improves the profitability by cost cut to turn into the black after fall 2010.Mitsubishi Steel acquires MSSC when Arvin Meritor concentrates management resources on commercial vehicle business and divests light vehicle business. Mitsubishi Steel and Arvin Meritor work out amount paid of acquisition.