ADAC Joins Alliance

February 27, 2006
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GRAND RAPIDS — As a result of a partnership agreement finalized last month, 34-year-old Grand Rapids automotive supplier ADAC Automotive, formerly ADAC Plastics, is already in line for potentially lucrative contracts with Honda and General Motors.

“This really gives us a global footprint,” said President James Teets. “If it was just ADAC in Grand Rapids, I don’t think we would have even had the opportunity to quote on these jobs.”

ADAC, one of the world’s largest producers of body-color door handle assemblies and other body-color trim pieces, last month joined a six-year-old partnership between WITTE Automotive and STRATTEC Security Corp.

The new enterprise, Vehicle Access Systems Technology, or VAST, combines ADAC’s core competency with that of German bracket maker WITTE Automotive and STRATTEC, the Milwaukee-based world’s largest producer of automotive locks and keys, to create a single-source global supplier of security control products for the motor vehicle industry.

The alliance allows the three companies to share technology, product and process information and to cross license.

It is not a merger.

Also, it is not a joint venture per se, but does have a joint venture component, with partners in two Chinese facilities and another in Brazil

“The VAST Alliance gives us a new level of global capability to meet the needs of our customers,” said Harry Stratton, CEO of STRATTEC.

“The global automotive industry is going through a rapid change,” added Vlad Hermann, president of VAST LLC. “To better serve our customers in this competitive and demanding environment, we combined the resources … into a powerful alliance.”

As part of the alliance, the three companies have forged a set of legal agreements that protect the home markets and products of each partner against the others. ADAC paid an undisclosed sum to enter the alliance.

“This isn’t as much a job creation thing as it is trying to sustain and keep our strong West Michigan roots,” Teets said. “Some of the growth will be here, while some will obviously be in different markets.”

Grand Rapids and West Michigan is vitally important to the 1,300-employee manufacturer, Teets said, but a large portion of the company’s growth relies on an ability to show the customer a global footprint.

“The jobs we’re producing today are of a global nature,” he said, using a new GM package as an example. Door handles for the Epsilon 2 will be produced in three regions of the world: North America, Europe and Asia

In a surprising development, the three companies have adopted a common logo. Related to that, ADAC is in the midst of a re-branding campaign and the development of a five-year strategic plan.

The company is now known as ADAC Automotive, rather than ADAC Plastics.

“It says we’re going to make our patch in automotive,” Teets said. “The other name was kind of limiting, especially if you’re an OEM in Detroit. ‘ADAC Plastics? What do they have, like three molding machines?’”

The company has been 100 percent automotive for several years, and has targeted annual growth of 10 percent for the next five years.

Teets admitted he would like to see the company diversify outside of the auto sector, but said there needed to be an opportunity that fit the company’s capabilities.

He did report that ADAC has some interesting technology moving through its research and development channels, including a lighting technology, but was not able to divulge specifics.    

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