Macedonia, OH, Auto Supplier to Lay Off About 80 Workers Because of Rising Medical, Material Costs

Posted: August 16, 2006, 9 a.m., EST

From Akron Beacon Journal

MACEDONIA, OH -- Automotive supplier Excello Engineered Systems of Macedonia, OH, will lay off about half of its work force in the next 45 days to offset rising raw material and medical costs.

More than 70 hourly workers and 10 or more salaried workers will lose their jobs, President and CEO Larry Brehm said. Total employment at the 111,000-square-foot plant, which has been open since 1995, is about 175, he said.

"It's unfortunate, and we tried to go every other way that we can," Brehm said.

Excello has bought automated equipment to take over processes in the production of the die cut and molded film and foam-laminated water shields that are installed in the doors and hatchbacks of cars, SUVs and other vehicles. The shields protect against water and hold down interior noise.

Excello has temporarily called back some laid-off workers to help install the new equipment, Brehm said.

The shields are made from polyethylene, an oil product that has gone up 38 percent in the last year, Brehm said. In addition, "we've incurred a 28 percent increase in medical costs this year," he said.

Excello could not pass along the higher raw material costs to its automotive customers, and the company's unionized workers "didn't want to share additionally in their health care," Brehm said.

Excello, which is owned by a Cleveland, OH, private equity firm, invested in automation to trim production costs, Brehm said.

"The owners chose not to close the operation and move it out of state," he said. The company operates a non-union facility in Jacksonville, FL.

Hourly workers in Macedonia are represented by the International Union of Allied Novelty and Production Workers Local 148.

Business agent John Wettrick acknowledged that "the medical costs did go up" for his members, who just began contributing toward their health care under the current contract.

Excello's jobs range in pay from $13 to $20 an hour, he said. In addition to the upcoming job cuts, about 50 union members already were on layoff, Wettrick said.

At its peak, the company employed more than 250 Local 148 members, Wettrick said. "Times are tough in the automotive industry," Wettrick said, but the union will "question anything that comes in under the rights in our agreement."

The union is reviewing the automated procedures that Excello is putting in, he said. Excello's predecessor, Excello Specialty Products, and other subsidiaries that made up the XLO Group of Companies were sold to Cleveland private equity firm Resilience Capital Partners LLC in December 2004.

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