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Haldex Moves Brake Adjuster Production From US To Mexico

By co-locating the production of brake adjusters within the company’s largest production facility globally, and thereby producing more products in one facility, Haldex says economies of scale are achieved.

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Haldex announced it will continue to streamline the production of brake adjusters by moving the production from the United States to Mexico. The process began in 2018 when machining of brake adjusters in the U.S. was moved to India. In a final step, the assembly is now being moved from the plant in Blue Springs, Missouri, USA to Mexico. Brake adjusters are Haldex’s largest product and they will now be manufactured in China, India, Hungary, Brazil and Mexico.

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By co-locating the production of brake adjusters within the company’s largest production facility globally, and thereby producing more products in one facility, Haldex says economies of scale are achieved. The manufacturing cost in Mexico also is significantly lower than it is in the U.S. The estimated cost-savings from this move are approximately SEK 25 million ($2.5 million USD) on an annual basis, once the move is fully completed. A total of 154 employees are affected, of which a few will be offered new positions within Haldex’s U.S. operations. The move will start immediately and will be completed during the fourth quarter of 2020.

During the fourth quarter of 2019, earnings will be impacted with SEK 27 million (about $2.7 million) as one-off costs related to the change in production. 

Haldex has the financial target of reaching 10 percent operating margin in 2022, excluding investments in new technology. During the second quarter, Haldex announced closure of two of its U.S.-based Friction centers, resulting in SEK 6,5 million (about $66,000 USD) in annual savings and SEK 5 million (about $508,000 USD) in one-off costs. 

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