Remy hybrid agreements help offset GM loss

January 27, 2010

Pendleton-based Remy International announced Wednesday morning that it will continue supplying electric motors to Allison Transmission Inc. in Indianapolis for its hybrid systems used in buses.

The agreement, as well a similar deal signed Jan. 21 with German automaker Daimler AG, helps to counter a loss of business from General Motors Inc.

GM said Tuesday that it intends to design and manufacture some electric motors for its cars and reduce the amount it purchases from outside suppliers such as Remy.

Remy has for years produced electric motors for GM’s hybrid sport-utility vehicles such as the GMC Denali and Cadillac Escalade.

Still, Remy anticipated GM’s decision and expects to receive additional business from new customers to offset the loss, company spokesman Matt Stewart said.

“I think when you have a big auto customer that has the capabilities that GM has, the tendency for them to bring some of their manufacturing in-house is not a surprise,” he said. “Remy is prepared for that.”

The U.S. Department of Energy selected GM in August to receive a $105 million grant to develop the capabilities to produce electric motors and related electric drive components.

The first GM electric motors will be used in the next generation of the automaker’s hybrids, such as the Chevrolet Tahoe SUV, beginning in 2013.

GM’s plans prompted Kevin Quinn, general manager of Remy’s electric motor division, to fire off a letter Wednesday to suppliers in an attempt to alleviate any fears.

“Remy’s growth plans in hybrid electric motors are not affected by this announcement,” he said. “We will continue, as planned, to develop a full line of products based on our technology.”

The company’s growth plans hinge largely on its development of “off the shelf” electric motors for hybrid vehicles.

The standardized line unveiled in October allows Remy to offer to hybrid automakers a variety of applications quickly and at a lower cost, as opposed to custom-tailored applications for a particular vehicle.

Remy said Nov. 16 that its third-quarter profit rose to $16.5 million, up from $4.3 million in the same quarter the previous year, as the company cut staff and pay to compensate for lagging sales.  Quarterly revenue fell 20 percent, to $223.7 million.


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