Swedish parts maker and all-wheel-drive specialist Haldex AB will establish a new facility in Mexico by fall of 2007, Ulf Ahlen, president of Haldex Traction AB, tells Ward's.

The facility will employ approximately 30 workers producing torque-transfer devices and electronic limited-slip differentials for an auto maker Ahlen declines to reveal.

He does say the auto maker will use the Haldex-supplied components for a North American assembly project that will include more than one model, debuting in mid-2008.

Haldex expects to invest SK40 million to SK50 million ($5.4 million to $6.8 million) in its Mexican operation, Ahlen says, adding the supplier expects to lease a facility approximately 21,530 sq.-ft. (2,000 sq.-m) in size.

Haldex currently is choosing a location for the new facility, Ahlen says in a phone interview from Sweden. “We are in the planning period now, and in August we’ll decide exactly where to set up our premises. It will probably be in the middle of Mexico.”

When fully operational, the facility will have the capacity to produce 200,000 torque-transfer units. Production of electronic limited-slip differentials will be added later, Ahlen says. For cost-saving purposes, both components will use the same power source and electronic control unit.

Haldex tapped Mexico for the new facility in order to drum up new business in North America, Ahlen says, where the supplier hopes to become a major player.

Haldex’s announcement comes as Ford Motor Co. is breaking ties with the supplier. Previously, Haldex supplied all-wheel-drive systems for several vehicles for Ford and its subsidiaries.

Ward's learns Ford is planning a facelift on the Freestyle, Montego and Five Hundred and changing the rear axle to Dana Corp. from Getrag GmbH & Cie KG.

“I think that the whole package with that new setup was a problem for Ford, but not because of our unit specifically,” Ahlen says.

“I won’t comment on reasons for Ford to do this, but the most powerful part of it was cost, not our unit, but total (cost), with the exchange factor not being favorable,” he says.

Haldex was slated to supply AWD systems for an undisclosed Ford project in 2008, but it recently was cancelled, Ahlen reveals. “At the moment, we’re not in with Ford after spring of next year.”

The Haldex executive denies Ford’s claim that the auto maker had to develop its own AWD system for future versions of its Ford Fusion, Mercury Milan and Lincoln Zephyr sedans, as well as the new ’08 Ford Edge and Lincoln MKX cross/utility vehicles due this fall, because Haldex lacked capacity to meet Ford’s needs.

Ford has said it plans to sell 500,000 vehicles equipped with fulltime AWD systems annually in the U.S. by 2007, including vehicles marketed by its premium import brands and by Mazda Motor Corp.

“It’s not correct that we didn’t have capacity,” Ahlen says. “We could’ve been doing 500,000 if they needed (that).”