LAS VEGAS, NV – Accuride appears to have turned a corner after taking the company private – and is pledging to double or even triple the size of the wheel-making business in as little as three to five years.
After selling off five operating divisions including Bostrom Seating, Brillion Iron Works, Fabco Automotive, Imperial Group and Brillion Casings and Farm Equipment, “we are now just a wheel company and a wheel end company,” president and Chief Executive Officer Rick Dauch said in a briefing to industry media.
It has been a long road. Accuride emerged from a 2010 bankruptcy, blamed on the debt from a 2005 acquisition. Crestview Partners acquired the company in 2015 in a deal that was completed in November. Crestview, founded by two partners of Goldman Sachs, oversees $7 billion of aggregate capital.
“We’ve reduced our debt by over $85 million,” Dauch noted. That has allowed a shift from bonds to a debt structure, realizing more-favorable interest rates. “That frees up cash flow, which allows us to invest in our business,” he said.
Dauch also recalled being thrown out of Volvo offices in 2011. Now Accuride is a Supplier of the Year nominee, and it reclaimed the standard wheel position on Volvo trucks after losing that role in 2007.
There’s also a need for plants to be flexible, especially in the face of the recent downturn in Class 8 truck sales, he said. Internal processes have been streamlined to include just one Enterprise Resource Planning system that is applied across nine operating sites. Almost all of the production meets Six Sigma quality standards as well.
Recent product introductions and extended warranties have related directly to the fight against rust and corrosion, which Dauch says costs the industry US $4 billion per year. “There’s a lot of rust on trucks,” he says.
The focus is ensuring that wheels are not part of the problem.
Wheels with Steel Armor coatings now have a five-year warranty, and EverSteel wheels have eight-year coverage. The EverSteel coatings could last more than a decade, he suggested. That could lead to even longer warranties once more field data is in hand, Dauch said.
Future products could include a lightweight aluminum brake drum that is being tested by six fleets and could come to market as early as 2018. One of those fleets are realizing 500 pounds of extra payload because of them, and makes four such trips per day.
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