Hydro has decided to consolidate its aluminium precision tubing operations in North America as result of the extremely challenging situation in the automotive industry, and will consequently close its aluminium tubing plant in Michigan.
The transfer of products and closure of the plant will be completed by the end of this year, ending 70 years of manufacturing operations at the Adrian site.
The demand for Hydro's aluminium systems and components from automotive customers has fallen sharply the past year, in line with the reduction in light vehicle production. The downward trend in the North American market started even earlier, in 2006, then accelerated last year and has shown no signs of rebounding.
Hydro has responded to this decline in the market with considerable reductions in production at all its automotive facilities, starting late last year and continuing today.
As part of the closure process, which will affect approximately 120 employees, Hydro will move some of the manufacturing equipment from Adrian to other plants in its global network. The plant's current business will be transferred to the Hydro-owned aluminium precision tubing facilities in Rockledge, Florida, and in Reynosa, Mexico.
Salvador Biosca, who is responsible for Hydro's automotive business, communicated the decision in face-to-face meetings with local management and employees on March 31.
"We don't see any short-term recovery in the market, so we have to adapt our business by consolidating operations in North America," he says. "We will wind down operations in Adrian gradually, and work with the union representatives and employees there to help find new opportunities.
"Our customer relationships will not be affected by the closure. We have available capacity to ensure the transition of products in a timely way, and customers will be involved and informed at every step in the process."
Hydro is the global market leader in the field of aluminium solutions for automotive and non-automotive heat transfer applications, including air-conditioning systems. The Adrian plant is part of this precision tubing network, serving customers that are located mainly in Mexico and the United States.
The Adrian plant, located about 50 miles southwest of Detroit, was established by Bohn Aluminum & Brass in 1939 and began its operations by manufacturing magnesium parts for the aircraft in Franklin Delano Roosevelt's United States war effort. Hydro acquired the plant from Bohn in August 1990. At that time, the plant had three customers and 143 employees.
Hydro's precision tubing unit has about 1,200 employees at manufacturing facilities in Asia, Europe, North America and South America.