to one third each in its three target markets. It was in that year that Citation first began considering a merger with Grede, a primarily ferrous metalcasting company that was at the time struggling through the recession. “Citation and Grede had
“What I see around the company is a sense of dedication and motivation and refinement the metalcasting industry has had to go through. People are motivated. I see efficiency.”—Bill Harvey, legacy Citation plant manager
talked over the past year and a half about a combination,” Grimm said in an interview in April. “For one reason or another, it didn’t work out.” For its part, Grede had divested its Greenwood, S.C., and
Vassar, Mich., metalcasting facilities in 2009 and filed for protection under Chapter 11 of the U.S. Bankruptcy Code in June of that year. The company cited a downturn in order volumes, particularly for its customers in the automotive and construction industries, and a desire to keep the company’s plants at high rates of utilization as reasons for the filing. What finally made the merger of the two struggling com-
panies work were common shareholders. Wayzata Invest- ment Partners LLC, Wayzata, Minn., and GSC Group, Florham Park, N.J., the majority shareholders in Citation at the time, submitted a bid for the purchase of Grede soon after it de- clared bankruptcy. When the purchase was approved at the end of 2009, the way was paved for Grede, with five casting plants remaining, and Citation, with eight, to be combined
under the umbrella of the shareholders. The merger officially occurred on Feb 5. “[The business combina-
tion] was driven by multiple factors,” Grimm said. “Grede and Citation have similar equipment [and serve] simi- lar markets. It was driven by shareholders that had vision and foresight, customers who wanted a long-term, viable
supplier, and myself, who met with Grede senior manage- ment over time. Then, as the economy changed, the need for consolidation became greater.” The result was a company that is even closer to the three-
pronged market approach Citation always envisioned for itself (one-third each in automotive, industrial and heavy truck). With legacy Citation operating at 20% automotive and legacy Grede at 55%, the combination put the current company at 40% automotive, 25% industrial, and 35% heavy truck. “We are going to focus our capital resources on iron,”
said Todd Heavin, senior vice president and chief operating officer. “Excessive material and process diversification has led to the demise of other companies.”
The Current Structure Grimm stresses that the combination of Citation and Grede
The legacy Citation Columbiana lost foam plant is unique among the 13 Grede metalcasting facilities. The remaining facilities all run sand casting lines.
20 MODERN CASTING / August 2010
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