• Capabilities: Strategic Environmental Consulting, Business Transformation and Resiliency, Asset Strategy and Performance
  • Sectors: Industrials, Automotive

Redundant Automotive Plants Closed and Sold

North America - During the global economic downturn in 2008, the automotive industry was weakened by an increase in fuel prices and declining demand for larger vehicles such as SUVs and trucks. Most automotive companies experienced double-digit declines in new car sales. Auto companies found themselves with massive excess manufacturing capacity and faced the need to close plants in order to reduce costs, improve profitability and survive.

$250M

cash generated from divestment

300

acres repurposed

Generating cash from divestment of surplus property

A global automotive manufacturer elected to permanently close three manufacturing plants located in multiple countries. Three plants, totaling over 300 acres of land, were considered surplus property, with ongoing carrying costs, environmental liabilities and, in some cases, community disfavor toward the company for the economic impacts of closing the plant. 

The corporate real estate group and team from the environmental office were chosen to lead divestment of the properties, contracting with Arcadis as their primary surplus property disposal consultant. Arcadis worked with the client team to decommission and decontaminate the facilities, support negotiations with local and central governments, sell manufacturing equipment, demolish plant structures, and prepare the assets for sale. 

All three properties were transferred to new owners to redevelop. The manufacturer generated more than $250 million (USD) from the divestment, providing balance sheet relief for the cash-strapped company.

Outcomes

$250M

cash generated from divestment

300

acres repurposed

3

idle manufacturing plants

Questions about this project

Rob Ellis

Automotive Sector Market Leader 248 994 2252 Ask me a question
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