HVAC manufacturer Lennox International will build a new manufacturing facility for its ‘Merit’ series air conditioners and heat pumps, moving production from Marshalltown, Iowa, and Grenada, Mo., to Saltillo, Mexico. The products are manufactured under the name LII United Products.
The company will continue to manufacture furnaces, “Elite” series air conditioners and “Dave Lennox Signature Collection” products in Marshalltown, Iowa.
The three-year project is expected to break ground in the second half of 2007, according to the company, with initial production starting in the second quarter of 2008 and ramping up to full production by early 2010.
The Saltillo facility will be 300,000 square feet at a cost of $45 million. Lennox said it anticipates cost reductions of more than $13 million by 2009 and $20 million by 2010, related to production at the new facility.
“There is fierce competition for the growing business in the Sunbelt region,” said Todd Bluedorn, LII United Products CEO. “Our Merit series offering is our primary Lennox-brand product line serving the Sunbelt market, and we must produce quality products at the lowest costs to compete in that market and grow our business.”
PPG to acquire Barloworld Coatings Australia
The Australian subsidiary of Pittsburgh-based PPG will acquire Barloworld Coatings Australia, the architectural paint unit of South Africa-based Barloworld Coatings. Terms of the deal were not disclosed.
Barloworld is a leading manufacturer of architectural and decorative paints in Australia, with brands including Taubmans, Bristol and White Knight. The company also operates production facilities in Villawood, New South Wales; and Glen Waverly, Victoria.
Barloworld’s plant in Glen Waverley will not be acquired by PPG but will continue to manufacture Barloworld brand products for PPG until production and distribution activities are transferred to other locations, PPG said in a statement.
Barloworld also distributes products through 85 company-owned stores, a network of distributors and numerous independent retailers. The paints are also sold through Bunnings, one of Australia’s largest home improvement retailers.
“We are continuing to accelerate our profitable growth in coatings by making strategic acquisitions,” said J. Rich Alexander, senior vp-coatings for PPG. “The Barloworld coatings brands are well-respected in Australia. By acquiring Barloworld’s Australian coatings business, we’ll be well-positioned to be the leading coatings manufacturer operating in all market segments and channels in Australia.”
In 2006, PPG acquired Protec, an Adelaide, Australia-based manufacturer and distributor of automotive refinish coatings and light industrial and high-performance coatings. Also in 2006, PPG acquired the Performance Coatings and Finishes business of Ameron International of Pasadena, Calif., which also has operations in Australia and New Zealand.
British Columbia forestry workers go on strike
Around 6,500 members of Canada’s Wood Council of the United Steelworkers union (USW) have gone on strike in British Columbia.
The strike began at midnight on Friday, idling more than 30 forest companies, according to news reports.
At issue is a request by the USW to restrict wood product companies’ abilities to schedule some working shifts up to 12 hours long. Additionally, the union is arguing for better severance pay for partial mill closures.
“The industry is badly fragmented and is unable to reach common ground with our union on the fundamental issues affecting our members,” said Steve Hunt, director of USW Western Canada.
The union is striking against several companies, many represented by the bargaining group Forest Industrial Relations (FIR). Around 4,500 unionized workers are employed by FIR’s client companies.
“We have bargained in good faith, and the union has been effective in achieving many of its goals,” said Terry Lineker, president and CEO of FIR. “However, given the market pressures we face, we will not offer more because any further decline in our competitive position will severely damage the industry.”
FIR members include West Fraser Mills and Western Forest Products.