New owner for Ford's wheels

By PAULA OLIVER

A group of local and Australian investors yesterday emerged as the surprise new owners of Ford's alloy wheel plant in Manukau.

The plant, which employs 550 people and exports most of its wheels to the United States, was the subject of buyout speculation.

But the rumours were flatly denied by a Ford Motor Company representative.

Yesterday it was revealed that weeks of secret negotiations had produced a deal to sell the plant to a team led by former Fletcher Challenge new ventures specialist Michael Morais.

Neither party would reveal the price, but they did say that earlier rumours of a $US500 million ($NZ1.2 billion) plant price tag were way off the mark.

Established in 1981, the alloy wheel plant has been a valuable export earner. Its foreign exchange earnings have doubled in the past three years to $135 million a year.

Ford spent $62 million upgrading the plant last year, almost tripling its capacity to 1.8 million alloy wheels a year.

The company decided to sell the plant because it no longer fitted into its core business.

After telling staff of the sale last night, consortium members moved quickly to reassure them there would be no job cuts or immediate upheavals.

Mr Morais, the new chief executive, said he had worked hard to put together a consortium because he wanted to see the plant and its knowledge base stay in local hands.

"The expertise is absolutely, and utterly at the plant - and it has always been there," he said.

"This is not a situation where the incoming party is going to be downsizing, or reducing, or trying to change the structure that's in place."

Operating under the name of Argent Metal Technology, the consortium includes institutional investment from ANZ Private Equity. Australian company ION is taking a majority shareholding.

ION, formerly Iron Carbide, is led by expatriate New Zealander Graeme Salthouse. It has a variety of manufacturing and casting assets in Australia, including a company called Castalloy which makes niche products such as racing wheels for the Holden team.

Mr Salthouse, who will eventually become chairman at Argent Metal Technology, said New Zealand had tremendous potential to expand its aluminium and magnesium export industry.

Mr Morais said ION worked in different markets to the alloy wheel plant.

"We would not have entertained any party that would have said they wanted to do a great restructure and absorb us into their company," he said.

"For now, it's steady as she goes. This plant has grown tremendously and that still needs to be bedded down before we move on."

Ford said the plant would remain an important supplier to its US parent company.

Mr Morais said he was confident the plant's sales levels would stay the same or even increase.

"The industry is not based around guaranteed trade. But obviously you wouldn't have a banking partner exposing its own balance sheet to a future that was not clear."