Tenneco to move last line jobs to Mexico

MILAN Employees are still absorbing the shock. The manager of Tenneco Automotive, a M
Annie Zelm
May 24, 2010

MILAN

Employees are still absorbing the shock.

The manager of Tenneco Automotive, a Milan manufacturing plant that makes rubber parts to ensure a smoother ride in vehicles, announced plans Wednesday to move all operations to Mexico -- affecting about 80 employees.

Permanent layoffs -- the second round announced in three months -- will take place during the next six to 12 months, regional plantmanager Steve Grilly said.

The move will not affect Tenneco's mixing operations and research and development engineering center in Milan.

Grilly said the company decided to move its elastomer operations to Reynosa, Mexico to reduce costs and counter pressure from the automotive industry's downturn.

"We are all disappointed and sincerely regret the impact that this action would have on our dedicated employees, their families and the Milan community," Grilly said.

He said today's volatile market resulted in unprecedented losses.

"We've recently experienced a lot of original equipment production volumes declining, and vehicles are not selling," he said. "Tenneco is taking these difficult steps to reduce costs and re-size the elastomer business to reflect current and near-term industry conditions."

The plant, one of nearly 80 facilities worldwide, has also felt squeezed between increased competition from low-cost elastomer producers and the high costs of rubber and steel.

Grilly announced the first round of layoffs two years ago, trimming its workforce by 30 people. In July, the Milan plant laid off 58 hourly and seven salaried workers -- most of whom earn at least $20 per hour plus benefits.

Grilly said company officials plan to work closely with workers to ease the transition. Many will be eligible for job retraining and extended unemployment benefits through the Trade Readjustment Act.

Others are eligible for retirement, so he plans to bring in retirement experts to help them plan for the future. Tenneco will discuss the decision and its potential effects on employees with the United Auto Workers Local 2352.

"We have been very fortunate to maintain a stable and dedicated workforce over the years, and wanted to notify our employees about this recommendation as soon as possible," Grilly said.

The Milan manufacturing plant has been a mainstay of the village since 1947.

Milan councilman Arthur Dickman said the closing will likely be an important topic of discussion at next Wednesday's council meeting.

The layoffs will result in a lack of income taxes and general fund money for the village.

"It's been here a long time," Dickman said. "That will affect the village -- how much, I don't know."