Haldex Mexico

Sweden-based Haldex has pared down operations and continues on as a global manufacturer of brake systems for heavy trucks, buses, and construction and agricultural equipment. Its products include all primary components and subsystems used in air brake systems, such as air controls, actuators, disc brakes, and remanufactured products. It has production plants in North America, South America, Europe, and Asia. In mid-2011 Haldex spun off its Hydraulic Systems division into a separate, publicly listed company called Concentric. In early 2011 the company sold its Traction Systems division to BorgWarner for approximately $205 million. Its remaining Commercial Vehicle Systems division now trades under the Haldex name.

In 2010 Haldex's board of directors had proposed a demerger of the group, whereby its divisions would be made into independent, listed companies. This reorganization was undertaken in an effort to reduce costs following one of the most historically severe declines in the global automotive industry. Overall revenues dropped more than 30% in 2009 over 2008, and one of its main markets -- truck and construction machinery -- experienced a 60% decrease from prior results. Both vehicle manufacturers and suppliers alike experienced sharply falling sales and profitability.

In addition to divesting its Traction Systems business, its smallest division in terms of revenue, Haldex made other cost-cutting moves, including reducing its work force by 35% and consolidating certain operations. It discontinued production of commercial vehicle system components in the UK and merged two of its hydraulics plants in the US. In 2009, as it faced the impact of the recession, the company shed its Garphyttan Wire division to Suzuki Metal Industry for 827 million kronor (about $105 million).

Although it's still not back to 2008 sales levels, these sacrifices are paying off as Haldex reported a 34% sales increase in fiscal 2010 compared with 2009. Cash flows were also strengthened as a result of the reorganization. Geographically, Haldex's sales in China are growing and the company is allocating resources to further build its local organization there, which consists of production, sales and marketing, and technical support activities. Today, overall demand for vehicles and vehicle parts is on the road to recovery, driven partly by legislative requirements for safer vehicles and consumer outcry for compact, more environmentally-friendly vehicles.

Where Haldex is seeing improvement is in the area of orders. In 2010 it received an order for a new generation of disc brakes from SAF-HOLLAND, a global manufacturer of trailer axles and air suspension systems. The order covers a five-year period and is expected to generate deliveries to the aftermarket for many years. In late 2010 Haldex initiated deliveries of the Alfdex oil separator to three new customers. Alfdex will be used in a new engine produced in Europe and the US by PACCAR and in a new platform of large engines for Navistar. John Deere is also expected to use Alfdex in some engines for agricultural machinery.