From Detroit Free Press
AUBURN HILLS, MI — Multibillion-dollar auto interiors supplier Lear Corp. said Thursday that it plans to close its Auburn Hills, Mich., plant by mid-June, a move that will put the factory’s 305 hourly employees out of work.
The Auburn Hills plant makes seats for the Buick LeSabre and Buick Park Avenue sedans, which are built at General Motors Corp.’s Orion Township, Mich., plant. Company officials said Lear doesn’t have the seating contract for the next vehicle to be assembled at Orion, the Pontiac G6 sedan, so it has no choice but to close its Auburn Hills plant.
Lear sent a letter to the State of Michigan in March warning that the plant could close.
Company spokesman Mel Stephens said the United Auto Workers (UAW) union and Lear reached an agreement Tuesday about the fate of the plant. He wouldn’t divulge details, but he said both parties knew about the possibility.
“Both sides understood the business situation, and that was that,” Stephens said.
The UAW contract at the Auburn Hills plan expired in May. The union declined to comment on the situation.
According to a person familiar with the situation, workers at the plant will receive severance packages that include a lump-sum payment and medical benefits in many cases. The company also said workers there will get preference when applying at other Lear plants.
Separately, the UAW and Lear reached an agreement Tuesday that would allow Lear’s two Grand Rapids, Mich.-area seating plants to stay open.
In the last couple of months, Lear and the UAW were engaged in intense contract talks over whether the company would merge its Grand Rapids and Walker plants, which could have resulted in 400 job losses. The contract expired in May.
Lear said in March that any job losses at the factories would result from not having enough future business at the plants. The union declined to comment on the details of the agreement. Both plants make seat parts for GM and other automakers.
The Grand Rapids, Mich., plant, also known as the Alpine facility, employs 650 hourly workers and the Walker factory, known as the Walkent plant, employs 362 hourly workers.
Lear spokeswoman Andrea Puchalsky said it is not uncommon for Lear to close plants like the one in Auburn Hills because of just-in-time manufacturing, which requires its suppliers to be near their customers. Auburn Hills is south of Orion Township.
A few months ago, Lear closed its Oakville, Ontario, plant because Ford replaced its Windstar minivan with the Freestar. Ford didn’t award Lear the new business for the Freestar.
“This is kind of the nature of the business because of just-in-time. We have to be located within 30 minutes of the customer,” Puchalsky said.
She said the move has nothing to do with restructuring, declining sales or so-called offshoring, the movement of work to plants overseas.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said automakers usually rotate business among a handful of auto interior suppliers, which include Lear, Magna International Inc., Johnson Controls Inc. and Faurecia, so it’s typical for any of these suppliers to close a plant when its contract is up.
“Bidding is really tough right now,” Cole said.
The situation at Auburn Hills caught the eye of the Michigan Gov. Jennifer Granholm’s office, which has contacted the supplier about tax breaks and incentives to retain jobs in the state. Michigan has lost more than 170,000 manufacturing jobs since 2000.
Mary Dettloff, a spokeswoman for the governor, said the office understands the circumstances at Auburn Hills but is pleased that the two plants in the Grand Rapids area will stay open.
Copyright 2004 Detroit Free Press. All Rights Reserved.
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