News / Auto parts supplier to shut down Sandusky plant
Date: 2016-11-11
Auto parts supplier to shut down Sandusky plant
SANDUSKY — An automotive parts supplier that was Erie County’s largest employer as recently as three years ago plans to shut down after the start of the new year.
Kyklos Bearing International LLC told state officials last week that it will begin laying off salaried and hourly workers Dec. 31. About 400 people will lose their jobs.
Metaldyne Performance Group, KBI’s parent company, said in May that it intended to close the plant, though local officials were hopeful they might be able to broker some sort of deal that would keep the factory open.
“It’s something we’ve been trying to work with them off and on for the past couple years, but this thing didn’t work out,” said Tom Ferrell, president of the Erie County Board of Commissioners.
The plant’s history in Sandusky goes back to just after World War II, when General Motors moved its New Departure Division there and opened the bearing factory. In the mid-1970s, it employed nearly 3,000 people.
GM later spun off the division as part of Delphi Corp. Kyklos Bearing purchased the plant out of Delphi’s bankruptcy in 2008.
While the deal kept the facility open, there were also provisions that hurt KBI’s long-term competitiveness. Chief among them were requirements that KBI honor contracts with the United Auto Workers negotiated under GM that put wages well above what similar suppliers would pay.
The purchase agreement required General Motors to purchase KBI’s products and subsidize those wages up to September, 2015. As that date approached, KBI sought significant concessions from the union in part because the company said it couldn’t compete with imported bearings from low-cost countries.
“We worked at the bargaining table, not only with KBI but we also had meetings with General Motors trying to work out an arrangement. But as hard as we tried we were not successful,” said Ken Lortz, Region 2-B director for the United Auto Workers. Though the work is highly skilled, he said cheap imports hurt KBI.
“It’s also an easy product to import from China or anywhere else in the world,” he said. “We were trying to compete with third-world country products at GM wages and benefits, and the company decided they couldn’t do that.”
An individual who answered the phone at the plant Monday said he had no information about the closure and there was no one to whom he could transfer the call. In May, Metaldyne officials said the Sandusky facility had a long history of making high-quality wheel bearings, but the company had decided to focus on different products.
Though the factory still had about 800 employees in 2013, its numbers have been dwindling, including a layoff of nearly 200 people about a year ago. Even so, officials say the loss will be noticed.
“When you lost that many jobs in one place, plus there were a lot of long-term employees there, it’s going to have an impact, no doubt,” Mr. Ferrell said.
County officials are hopeful another manufacturing company might purchase the plant and put it back in use.
Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.
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