RACINE, Wis. — Modine Manufacturing Co. has announced plans to scale back its focus on the global vehicular HVAC market. The company plans to divest its Korean-based vehicular HVAC subsidiary, which includes standalone vehicular HVAC research and development, testing, application engineering and manufacturing capabilities for automotive, commercial vehicle, off highway, bus and train HVAC systems, along with similar technical support and manufacturing for original equipment (OEM) automotive, commercial vehicle and off highway engine and powertrain cooling components.
The Korean HVAC business was included in Modine’s acquisition of WiniaMando Inc.’s Automotive Climate Control division in 2004 as part of its strategic expansion into the Asian OEM cooling and vehicular HVAC markets. Modine bought the business for approximately $80 million.
“The Korea acquisition heightened Modine’s technical presence in Asia and brought regional research and development capabilities that served as a foundation for subsequent expansion of our relationships with key OEM customers,” said Modine President and Chief Executive Officer Thomas Burke. “At the same time, given its continued focus on vehicular HVAC for a highly concentrated customer base, our Korean-based manufacturing operations, while achieving top line growth over the past four years, have had difficulty attaining the global revenue diversification, profitability and return on capital employed targets envisioned at the time of the acquisition and, ultimately, expected by our shareholders.”
Modine said its other vehicular HVAC businesses, including its 50 percent share in Anhui Jianghaui Mando Climate Control Co., Ltd., located in Hefei, China, its North American vehicular HVAC module assembly business and its assembly operations in its Shanghai, China facility, will be the subject of further evaluation over the next 12 to 18 months.
Modine President and CEO Thomas Burke stressed, however, that the company will retain its North American and European focus on refrigerant component and system R&D, design, manufacturing and sales.
