Dorman Products announces the grand opening of an additional USA-based drive shaft manufacturing facility
Dorman Products (NASDAQ:DORM) announced the grand opening of a new 100,000 square foot drive shaft manufacturing facility in Virginia Beach, VA on June 12, 2024. This new site, five times larger than their previous one, features advanced machinery, robotic welding, and specialized packaging areas. The expansion aims to meet increased demand, enhance production, and improve shipment efficiency of their 3,600+ precision steel and aluminum drive shafts. Senior Vice President Eric Luftig highlighted that this facility represents a significant investment to better serve customers and expand Dorman's USA manufacturing footprint to over one million square feet.
- New 100,000 sq ft facility is five times larger than the previous site.
- Significant investment in advanced machinery and robotic welding.
- Facility aimed to meet increased demand for drive shafts.
- Addition of custom packaging area to ensure product safety during shipping.
- Expansion enhances production and shipment efficiency.
- Increases Dorman's USA-based manufacturing footprint to over one million square feet.
- Creates more manufacturing jobs in the United States.
- No immediate financial data on the cost of the facility or expected ROI.
- Potential increase in operational costs due to the larger facility.
- Lack of specific information on how much capacity will increase.
Insights
Dorman Products’ investment in a new drive shaft manufacturing facility highlights the company’s strategic growth and commitment to meeting increased demand in the automotive sector. The expansion from a smaller site to a 100,000 square foot facility suggests that Dorman anticipates significant growth in orders and production volume. This move is likely aimed at optimizing production efficiency, reducing lead times and improving product quality through advanced technology.
From a financial perspective, such a substantial investment (referred to as ‘millions of dollars’ in the announcement) in a new plant can initially strain cash flow, but it is likely to yield long-term benefits. The potential for increased revenue through higher production capacity and improved product quality may attract new customers and enhance customer loyalty.
Additionally, expanding the manufacturing footprint within the United States could reduce shipping costs and logistics complexities compared to offshore production. Investors should consider the impact on gross margins and the possible increase in market share if the demand trajectory continues. However, it is important to monitor the execution risks associated with scaling production and integrating new technologies.
The launch of Dorman Products’ new facility in Virginia Beach is a strategic move in the competitive automotive aftermarket sector. The statement about increased demand for drive shafts indicates a positive market trend. Dorman is positioning itself to capitalize on this demand by expanding its production capabilities significantly.
By leveraging advanced manufacturing technologies and enhanced packaging methods, Dorman is likely aiming to distinguish itself from competitors through improved product quality and reliability. This can be particularly important in the automotive sector, where quality and safety are paramount.
Furthermore, the fact that the facility is located in the USA is noteworthy. With growing sentiments around local manufacturing and supply chain resilience, this move might resonate well with customers and stakeholders who prioritize domestic production. The facility’s size and technological advancements could also improve Dorman’s operational efficiencies, potentially leading to quicker turnaround times and better customer satisfaction.
Overall, this development signals Dorman’s commitment to growth and innovation, making it an attractive option for investors looking for companies with robust expansion strategies.
COLMAR, Pa., June 12, 2024 (GLOBE NEWSWIRE) -- Dorman Products, Inc. (NASDAQ:DORM) is proud to announce the grand opening of a new drive shaft manufacturing facility in Virginia Beach, VA (USA). A ribbon cutting ceremony to celebrate the launch of the expansive factory at 464 Progress Lane is scheduled for Wednesday, June 12th. The facility joins existing Dorman sites in Reno, NV and Portland, TN that also design, manufacture and distribute the company’s 3,600+ precision steel and aluminum driveshafts and related driveline components in North America.
At 100,000 square feet, the new plant is five times the size of the company’s former Virginia Beach site on Squadron Court. According to Shiva Menon, General Manager for Dorman’s Driveline business, the expansive new facility is representative of Dorman’s growth in the automotive drive shaft market sector.
"We've seen increased demand for this product line, and we're making this move to expand our capacity to produce, stock and ship our products to better serve our customers," says Menon.
Drive shafts are safety-critical components, and efficiently producing and shipping them quickly is a Dorman strength. The new plant boasts an impressive array of advanced computer-controlled machine tools, robotic welding, drive shaft balancing equipment and testing gear, all designed to efficiently engineer and manufacture front and rear drive shafts.
Steel and aluminum drive shafts require protective packaging to ensure that the precise balance achieved during final testing is maintained during shipping to Dorman customers all over North America. The new site has a distinct area devoted solely to custom packaging finished shafts with a new and improved packaging method.
Eric Luftig, Senior Vice President, Product, says “Dorman invested millions of dollars in this world-class facility in response to our customers’ needs. The new Virginia Beach plant will help our team of engineers and skilled tradespeople design, produce and promptly ship some of the highest quality drive shafts in the automotive industry.”
Luftig adds, “We’re especially proud to note that this newest facility increases Dorman’s USA-based manufacturing footprint to well over one million square feet nationwide. We’re a global manufacturer with one of the most recognized names in the automotive aftermarket. It’s especially exciting when we can create even more great manufacturing jobs right here in the United States.”
Visit DormanProducts.com/signup to sign up for all of Dorman’s new product announcements, and learn more about Dorman on our Virtual Tour at DormanProducts.com/tour.
Note: Vehicle-in-Operation (VIO) information in this press release is based on Dorman’s analysis of third-party reports.
Contacts
- Marketing: Steve Gisondi, Vice President of Marketing
sgisondi@dormanproducts.com
- Investor Relations: David Hession, Senior Vice President, Chief Financial Officer
dhession@dormanproducts.com
About Dorman Products
Dorman gives repair professionals, enthusiasts, and owners greater freedom to fix motor vehicles. For over one hundred years, we have been driving new repair solutions, releasing tens of thousands of aftermarket replacement products engineered to save time and money, and increase convenience and reliability.
Founded and headquartered in the United States, we are a pioneering global organization offering an always-evolving catalog of products, covering cars, trucks, and specialty vehicles, from chassis to body, from underhood to undercarriage, and from hardware to complex electronics. See our full offering and learn more at DormanProducts.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “likely,” “probably,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “views,” “estimates,” and similar expressions are used to identify these forward-looking statements. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties, and other factors (many of which are outside of our control) which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. For additional information concerning factors that could cause actual results to differ materially from the information contained in this press release, please see Dorman’s prior press releases and filings with the U.S. Securities and Exchange Commission (“SEC”), including Dorman’s most recent annual report on Form 10-K and its subsequent SEC filings. Dorman is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.
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