New US factory for MTU engines

05 Mar 2010

MTU engine production in the USA is moving to this former SKF plant

MTU parent group Tognum is setting up a new engine assembly and manufacturing plant for the MTU brand in Aiken County, South Carolina, USA. This will replace the existing assembly plant in Detroit, and is part of Tognum’s policy of expanding its production network to make it more international.

The new plant, situated at Graniteville in Aiken County, offers Tognum the opportunity to produce engine parts in the US dollar region, develop new markets and respond more flexibly to changing market requirements. Production is scheduled to begin at the end of 2010.

The new plant is part of the plan announced by Tognum in 2008, but shelved due to the global economic crisis. To achieve its aims, Tognum has purchased an existing building and the associated premises from SKF. The company says it will benefit from the currently favourable price levels on the industrial property market. In addition to the assembly of engines, the plant will be used for the manufacture of engine components such as cylinder heads and high-volume engine attachments and fittings. The premises can be expanded if extra capacity is needed in the future.

 “For a global group like Tognum, a global production network is absolutely essential, and the plant in Aiken has an important role to play. By manufacturing parts in the USA, we are less vulnerable to exchange-rate fluctuations between the US dollar and the euro, have production facilities located close to the customer, fewer parts in an advanced stage of manufacture to be transported from Europe to North America and will subsequently reduce high import duties. The higher value added in the USA also increases our chances when competing for public contracts offered by U.S. authorities,“ said Volker Heuer, chairman of the executive board and CEO of Tognum AG, explaining the reasons behind the move.

In the medium term, the Tognum Group will be investing some $45 million (around €33 million) in the 40 hectare site, which includes a 25,000 m² production building, and in assembly, inspection and production facilities. The sales organisation, management and the entire office staff of Tognum’s North American subsidiary MTU Detroit Diesel will remain in Detroit.

Tognum Group says that it currently has 11 manufacturing and assembly sites, two of which are in the USA. In autumn 2009, production of cylinder liners began in Turkey. In summer 2010, the joint venture with the Chinese Norinco Group will start production of gensets in Datong in northern China.

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