No job cuts at former Lear plant

HURON Workers at the International Automotive Components plant, formerly known as Lear, are operatin
Sandusky Register Staff
May 24, 2010

HURON

Workers at the International Automotive Components plant, formerly known as Lear, are operating under a new name and contract.

Members of the UAW Local 913, which represents workers at the plant, just ratified a new contract that will run through June 30, 2009.

The changes are good because they do not involve any major economic concessions and there are no layoffs planned, said a union official who did not want to be identified for this story.

"We ratified the agreement by a vote count of approximately 288 for and 160 against," the union official said. "There were no major cuts in wages, but there was a freeze on COLA adjustment and a slight increase in our medical insurance premiums. But I think things look good at this point."

He explained that the medical benefits offered under the old contract will remain intact, but workers will have to pay an extra $10 each month for coverage.

Wages average about $16 per hour at the plant, according to the union official. Under the terms of the new contract, skilled trades workers such as lead electricians will earn $20.83 per hour with a 2nd or 3rd shift differential increase of 30 cents per hour. Operators will make $14.76 per hour.

"We will lose about 68 cents an hour under the new contract," the union official said. "But at the present time, things are looking better. There aren't job cuts planned."

According to the union, the plant currently employs nearly 80 workers. But that may increase sometime over the summer.

"It looks like we may have a project coming to the plant sometime in August," the union official said. "It will be an instrument panel for minivans and the project might bring 20 jobs."

New York-based international financier Wilbur L. Ross acquired Lear Corp.'s interior systems division officially last month, which includes the plant in Huron, in a deal that began unfolding late last year.

Ross, 68, is chairman of the International Automotive Components Group LLC, a new joint venture among W.L. Ross & Co. LLC, New York; Franklin Mutual Advisors LLC, a subsidiary of Franklin Resources Inc., San Mateo, Calif.; and Lear.

In the deal, Lear holds 25 percent of the stock in the venture and warrants for an additional 7 percent equity interest.

IAC, 1608 Sawmill Parkway, inherits some choice tax abatements and government assistance enjoyed by Lear since 1997. The Department of Development has contributed a minimum of $100,000 and Huron has ponied up a couple of abatements.

With the change in ownership, what will happen to the government assistance and local tax abatements? Maybe a lot, or nothing according to the state.

"On a grant, as long as nothing changes on the project that was approved for the grant, then everything would remain the same," according to Melissa Arment, spokeswoman for the Department of Development. "If new ownership wanted to make changes, and depending on the change request on the grant, the company would have to go to the State Controlling Board."

First created in 1917, the Controlling Board provides legislative oversight of certain capital and operating expenditures by state agencies and has approval authority over various other state fiscal activities. IAC has yet to petition for any changes with them.

Huron city officials know some things will have to change, yet they are hopeful Ross keeps his new business a local venture. City Manager Andy White has yet to speak with the billionaire financier who now holds the keys to one of Huron's anchor businesses.

"There are two tax abatements currently in place for Lear. One from 2003 and the other from 1997," he explained. "The 1997 abatement expires this year on December 31, so that is falling off anyway."

White said IAC will have to file new paperwork for next year to "enjoy the same benefits from the tax abatement that Lear did." Also, the 2003 abatement is headed for extinction before its 10-year scheduled run.

"That one is fading out because the state is getting rid of personal property exemptions, but Lear understood that," White said.

Mayor Terry E. Graham Sr. said he hopes to see Ross's signature on tax abatement forms for the future.

"There has not been any contact as of yet, but I am hopeful things will continue as they did with Lear and IAC will be a part of the community for a long time," Graham said. "We will see what happens."

One thing still happening is Ross buying troubled corporations. IAC just announced a definitive agreement to acquire Collins & Aikman's Carpet & Acoustics Soft Trim Division, which operates 16 plants in the US, Canada and Mexico and generates annual sales of approximately $615 million.

This deal means that IAC over the past 18 months has assembled a $5 billion business worldwide.

Ross issued a statement about that purchase. In it, he wrote, "We are very pleased to incorporate Soft Trim into IAC NA. The combination of the two entities would create a North American footprint with 42 facilities and over 15,000 employees. Worldwide the IAC companies will now have sales close to $5 billion per year."

He has not responded to requests to talk about his Huron facility.