Technology Corp. (ATC) said earlier this week that it received verbal
notice from Honda of the automaker’s intention to in-source the
remanufacturing of automatic transmissions for its vehicles as early as
ATC previously provided remanufactured automotive transmissions for
Honda. The business accounted for about $52 million of ATC’s 2008
revenues approximately 10 percent of company revenues and 29 percent
of drivetrain segment revenues.
Todd Peters, president and CEO, said, "Of course we are very
disappointed that we will no longer be remanufacturing automatic
transmissions for Honda. We understand that this decision is driven by
Honda’s expectation of declining need for remanufactured transmissions
as a result of the improved quality relating to their newest generation
of transmissions. Honda has been a valued customer since 2002 and we
expect to provide other services to them in the future.
"As a result of this development, we are withdrawing our guidance for
2009 until we can assess its impact on our operations, including the
carrying value of our assets."