Collins & Aikman To Supply Parts To Hyundai-Alabama Without Royalty Payments - Get It?

SEOUL April 18, 2003; Dow Jones reported that South Korea's Hyundai Mobis Co. said Friday it has agreed with Collins & Aikman Corp. of the U.S. to set up an automobile parts joint venture in Alabama.

After the joint venture company is launched later this year, Hyundai Mobis and Collins & Aikman will invest a combined $7.3 million to build and complete a production facility by 2004, Hyundai Mobis said in a release.

Collins will own a 75% stake in the venture and Hyundai Mobis will hold the remaining 25%, the South Korean company said.

The establishment of the venture is aimed at providing frames for dashboards to Hyundai Motor Co.'s plant slated to open in 2005 in Alabama.

Hyundai Mobis is an affiliate of Hyundai Motor, South Korea's largest automobile maker.

Hyundai Mobis expects the venture to make sales of $25 million a year from 2005 and have an annual capacity of 300,000 units.

In addition to forming the joint venture, Hyundai Mobis and Collins & Aikman have agreed to share the U.S. company's patented technology without royalty payments as part of efforts to expand their technology alliance.

The two automotive parts makers have had technology tie-ups since 2001, said Hyundai Mobis.

Collins & Aikman is a major dashboard maker in the world. Its clients include General Motors Corp. (GM), Ford Motor Co. (F) and DaimlerChrysler AG (DCX), Hyundai Mobis said.