Hella's Turnaround Contracts, Stanley tieup boost Hella's outlook It was a year ago that Joseph Borruso told us about his new challenges as president and chief executive officer of lighting and electronics supplier Hella North America Inc. (see WAW - Dec. '99, p.117).

He had a hulking, new manufacturing site in Plymouth, MI, that was immaculate - even carpeted. But it sat empty for the most part.

In York, SC, Mr. Borruso spoke of another new plant that sat padlocked because it had no customer. Two expensive assets going to waste.

Today, he reports that his company's making progress. The York plant has begun producing foglamps for Daimler-Chrysler Corp.'s '01 Stratus/Sebring lineup and it has a headlamp contract for a future DaimlerChrysler vehicle.

The production target at York is 1.5 million headlamps per year, by 2004, Mr. Borruso says.

The Plymouth site is getting a $20 million investment for a new assembly line to produce Hella's new non-contact position sensors for electronic throttle-control (ETC) systems, beginning in the first quarter of '01.

As Europe's largest supplier of ETC, Hella says it will supply European automakers with more than 4 million units this year.

More than 70% of North American vehicles now use conventional cable-actuated throttles, but the company predicts that within 10 years virtually all vehicles built in North America will have electronic accelerator controls.

The new business should push the Plymouth facility to 75% capacity and the York plant to about 50% capacity by 2003, Mr. Borruso says.

The German company's global outlook also is improving, thanks to a new marketing partnership with Japanese Stanley Electric Co. Ltd.

Details of the tieup were not disclosed at press time, but Werner Beneken, member of the company's management board, says it will give Hella a door to Asia/Pacific, while affording Stanley access to Europe. There is no exchange of equity in the deal.

The two companies' product lines are almost identical, each producing a full range of automotive lighting and electronic components. Stanley isn't related to the hand-tool producer. It was founded in Japan in 1920 and was named after the 19th century explorer Sir Henry Morton Stanley.

Mr. Beneken says the deal illustrates an emerging supplier trend of cooperation rather than consolidation.

An interesting twist in the deal: Hella is privately held, while Stanley is public.

In North America, Hella's sales stand at $350 million, and Mr. Borruso has set a goal of $1 billion by 2005 and more than 15% market share.

In the lighting sector, Hella's Advanced Frontlighting System (AFS) smart headlamps will begin appearing on '03-'04 model vehicles, top executives say.

The AFS microprocessor-controlled head-lamps automatically swivel to provide better lighting around curves and adjust their beam patterns due to weather conditions. The intelligent lights are at the top end of a family of modular headlamps Hella is offering.

Hella is offering four price points for its new modular lamps, starting with a base high-intensity discharge (HID) xenon light, which costs about $150 more than a conventional halogen lamp.

Mr. Beneken predicts 100% of European luxury cars will be equipped with HID lamps by 2005, and 50% of all new cars in Europe will feature them by 2010.

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