press release - gkn jackson center - may 2008 - FAD assali

GKN Axles DivisionGKN JACKSON CENTER522 North Main StreetP.O BOX 569Jackson Center, OH 45334USAT +1 937 596 6125F +1 937 596 6974www.gknaxles.comPRESS RELEASEGKN JACKSON CENTER – MAY 2008“The hard time was at the end of the ‘80s, when our patent was expiring, our client baseshrinking, and the outlook for the future was grim”.Jim Kitzmiller, product development manager at GKN Jackson Center, has an entirecareer working in the same plant in Ohio. He can look back at the past with a sense ofrelief, and with gratitude for the way things have shaped up: in the last three years, afterthe factory was purchased by the international giant GKN and added to the AxlesDivision, business has picked up: new sectors of the market have opened for the torsionaxle and springs, as well for spindles and hubs coming off the assembly line, and newproducts brewing in the company’s pipeline fuels today the hope for further expansion.It hasn’t always been like this. As a matter of fact, Jim’s memory of the rise, fall, andrebirth of the Henschen Company, is a perfect paradigm of the fate many othercompanies in the “rust belt” have endured. Jim is a privileged worker: he has lived, andkept the job, to tell the story.Mr. C.W. Henschen opened the Jackson plant in 1949 to manufacture torsion axles andsprings under an exclusive patent, which allowed him to introduce the technology fromEurope to the US. His business thrived for decades as the agricultural farms in theregion were booming. A big factor for his success was also the proximity to the plantwhere the Airstream was made. The trailers manufacturer quickly became one ofHenschen’s axles biggest clients.As generations of affluent American workers retired, they took to travel the new roadscanvassing the country. The Airstream became a symbol of such mobility, and theassembly line at Henschen kept busy. “We were the only source for torsion axle and

springs” Jim recalls “we could name the price for our products, and our customerswould pay”.Over time, the alliance turned lethal: Beatrice Food, owner of Airstream, purchasedHenschen Industrial in 1976 and transformed it into a sort of captive supplier, withlimited exposure to the market. The company started suffering for lack of investments innew products, while the Airstream business was depressed by the oil crisis of the ‘70s.The result was sequel of new owners, which eventually lead to the acquisition ofHenschen by QDS, a division of Agrimax, and later, Lakin Corporation. By the year2001 QDS/Henschen had become a highly specialized manufacturer of torsion axlesand springs, with a disproportionate percent of his production going to a single client:the British giant GKN.The real change of direction finally took place in 2005, when GKN decided to buy itssupplier. This time the move was not conservative retrenching as with Airstream, butrather an exposure to a much more open and competitive market. The plant, now calledGKN Jackson Center, was restructured and refinanced, and is now part of GKN AxlesDivision, together with two other companies recently acquired by the group. One is GKNFAD of Carpenedolo, Italy, producer of agricultural axles, hubs and spindles, and alsohost to the division’s headquarters. The other is GKN Geplasmetal of Saragoza, Spain,manufacturer of frames and torsion axles for light trailers.Together, the three have become a major player in the OffHighway division, takingadvantage of GKN’s global presence in the marketplace. Revenues for GKN Axles lastyear were 69 million dollars, a number that Managing Director Domenico Traversowants to see growing to $ 132 million by 2012. Their clients today are OEM companiesthe caliber of John Deere, CNH, and Caterpillar. From the mother company, JacksonCenter has imported the principles of lean manufacturing and open market competition,a vision for the future, and a focus on the agro business, in a time when the fast paceddevelopment of corn based ethanol is opening up a promising growth for the sector.