Technitrol said Tuesday it will close production operations for its automotive electronic components businesses in Germany and Tunisia and relocate the capacity to China.
The Philadelphia-based company said the Germany and Tunisia factories, acquired as part of the ERA Group in early 2006, produce coils for automotive ignition and other electronic control applications aimed at both OEM and aftermarkets. In addition to improving production economies, the move is intended to position the business to take full advantage of the rapidly growing automotive markets in China and other parts of Asia, the company said.
Automotive suppliers in Europe and North America are increasingly sourcing or attempting to source components from China in order to lower material costs and improve or restore their profitability and prepare for inevitable competition from Chinese automotive manufacturers.
Technitrol’s Electronic Components Group, trading under the name Pulse(R), has been operating manufacturing facilities in China for more than two decades. It currently has more than 26,000 employees operating out of nine manufacturing sites from southern to northern China as well as a recently established facility in central China.
The Electronic Components Group's hub in Europe, which provides engineering, sales, marketing, finance and related support to all of the Group's European operations, will remain in Herrenberg, Germany.
The company estimates the cumulative actions will generate between $10 and $12 million in additional annual operating profit.