New player in a crowded brake and axle arena

March 10, 2005
New global heavy-duty brake and axle manufacturer opens headquarters in U.S.

Axle Brake Technology, Corp. (ABT), a new global engineering and manufacturing firm has opened its headquarters in central Alabama. The new company plans to complete a new manufacturing facility in central Alabama to provide heavy-duty axles and brake components for Class 6, 7, and 8 trucks and trailers in a competitive OEM and aftermarket arena.

These components include heavy-duty axles, automatic slack adjusters, custom forgings, S-cams, brake shoes, brake kits and other heavy-duty truck and trailer parts.

Rod Richardson, ABT’s president & CEO, told Fleet Owner that he envisions the company will be able to leverage its three established world class manufacturing facilities in Asia, with a fourth under construction, to provide customers with competitive prices while using its proximity to a Hyundai automotive plant and the Port of Mobile to cement relationships with suppliers, as well as the customer base of the Asian facilities.

The Asian plants, which had previously operated individually, will work with the North American plant as one manufacturing conglomerate under the ABT corporate headship.

“We’re 100 miles away from one of the hottest ports in the Southeast as a result of the Hyundai plant,” Richardson said, adding that Hyundai has just over 20 tier one and tier two suppliers. “Hyundai Manufacturing will be starting up its first North American automotive plant in the Central Alabama Enterprise and Renewal zone and this will accelerate the steady flow of global vehicle manufacturing facilities either opened or planned within a close proximity of our North American plant.”

Additionally, the construction of the Alabama facility will utilize tax abatements to essentially build a plant that produces a U.S. domestic product.

There is increasing evidence that manufacturing is making a comeback in the U.S., analyst Chris Brady, president of Commercial Motor Vehicle Consulting told Fleet Owner. “Look at Hino who now has an assembly plant in the U.S.— previously they were importing vehicles,” Brady said. “Volvo expanded its Hagerstown, MD plant producing parts rather than importing.”

ABT’s proximity to the Hyundai facility may actually be an overstated advantage, Brady said, pointing out that there may be little crossover between the automotive supplier and the medium- and heavy-duty axles and brake components.

However, ABT’s Richardson disagrees. “There’s tons of infrastructure for the Central Alabama Enterprise and Renewal Zone using the port, power, and labor pool— all being piggybacked with what Hyundai started,” he said.

For the commercial vehicle industry, building operations in North America does present some key advantages, Brady said. “You’d be closer to your supply base and work more closely with the OEM, which would strengthen the relationship from OEM to component supplier.

“However, the brake and axle market is very competitive, and there is a greater emphasis towards working with fewer suppliers,” Brady continued. “They would be going up against Dana and ArvinMeritor— these are established players with long-term relationships with customers.

“But there is a huge aftermarket. A lot of companies have established relationships with distributors through OE channels and independents. For a company to sign up another supplier of brakes would mean more inventory for them to manage. There has to be an incentive.”

ABT has a large base of existing customers that are supplied by the Asian facilities, including some “major players” in the heavy truck manufacturing industry from all over the world, Richardson told Fleet Owner, although he declined to provide specific names.

The manufacturing operations in Asia also have greater control over raw material costs, which could grant ABT an edge. Richardson, noting his tenure with the Reliance Trailer Group as COO said, “I got a major wakeup call because…we were held hostage to the steel price increases. The trailer manufacturers have to have some relief, and if I could give them that on components, every little thing helps. Some [trailer manufacturers] have had major surcharges. Although I can’t make up for all that just on components, I could help in a way that puts Americans to work, use tax dollars to our advantage, and use global utility standards.”

ABT’s Asian plants are using world class QS or ISO 9000 and the new TS 1646 industry quality standard. “Our Asian manufacturing operations are already meeting today’s global quality and price targets, and we’ll extend that knowledge into our new distribution and manufacturing facilities in or around the Central Alabama Enterprise and Renewal Zone,” Richardson said.

Current ABT warehousing facilities located in North Carolina will be expanded by the new North American central distribution, warehousing, and manufacturing facility in or around the Central Alabama Renewal and Enterprise Zone.

About the Author

Terrence Nguyen

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