Workers ask for help

New Departure, Delphi retirees band together
Melissa Topey
Aug 17, 2013

The automotive bearings plant that's been a major employer in the region for more than 60 years will close if it can't get contracts for new work. 

That's the fear for a group of retired workers and current employees at Kyklos Bearing International (KBI), the factory at Perkins and Hayes avenues formerly known as New Departure and Delphi. 

The group hopes to spread a call to action, starting with a letter to local governments seeking support to save the plant. 

"We are asking you to please become involved in trying to keep this facility viable," states the letter, which was hand-delivered to Erie County commissioners, Sandusky city commission and the Perkins Township trustee board. "Should the plant close it would be devastating to the community. These are high-paying jobs that could not be replaced. The lost revenue and added social cost to the county should motivate us all to do everything possible to keep the plant a strong and growing business.”

The group wants local governments to approve resolutions asking General Motors and other potential customers to bring new business to the plant. The group also asked local officials to contact state and federal legislators for help in saving the plant. 

Sam Artino, a Huron city commissioner and a retiree from the plant when it was known as Delphi, said the letter was also delivered to the Sandusky and Perkins school boards. More letters will be sent to lawmakers, including U.S. Rep. Marcy Kaptur, U.S. Sen. Sherrod Brown and others.

“KBI is the same plight as every other plant. It is the plight of the middle class in manufacturing,” Artino said.

KBI has about 500 hourly and 80 salaried employees, far fewer than in the plant's heyday.

Employees have fought to save the plant for years, even offering at times to take pay cuts, said Chris SimsUAW shop chairman. 

That effort comes up against unfair marketing practices, he said. One competing bearings manufacturer offered to sell GM finished product at a cost lower than it is just to buy the raw materials needed to manufacture the bearings. 

"Even if everyone worked for free, the quote would be impossible to beat," Sims said.

That company is based overseas but has a plant in South Carolina, he said.

Pricing a product below what it would cost to produce is known as dumping, he said, and it is done to unfairly undermine a competitor. 

Artino said the letter already has gotten some attention. The group has been invited to the Aug. 26 Sandusky city commission meeting. 

“Keeping these jobs is a No. 1 priority for the county, the city, the township," Sandusky city commissioner Wes Poole said. "All governments should be working together doing whatever is possible.” 

 

Shuttered manufacturers

Norwalk

CVG Mayflower
Fanny Farmer
Van Dresser's

Sandusky

Philco Radio
Thakar Aluminum 
Sandusky Cabinets
Scott Paper
Barr Rubber
American Crayon
G&C Foundry
Sandusky Plastics
Bechtel McLaughlin
Universal Clay
Lyman Boats
Hinde & Dauche
Ferrell Cheek
Esmond Dairy

Port Clinton 

Standard Products

Huron
Pillsbury (ConAgra)

Bellevue
Armstrong Air Conditioning
Progress Plastics

Fremont
Kelsey Hayes
Epco Machines

 

Comments

allofus

This should give ALOT of hope to the Freudenberg employees who think they need a union! WAKE UP PEOPLE! THESE CUSTOMERS ARE AVOIDING UNION MANUFACTURERS AT ALL COST!

The Big Dog's back

Did you read the article? Why of course not. Bashing unions solve nothing.

pavedparadise

From a KBI employee

In the very recent, former Delphi employees at the KBI plant took a 40% wage reduction and work rules were relaxed to the point management can now do production work, etc.

When KBI took over the plant in 2008, the owners emphasized the point $50,000,000 a year off the top of plant profits were going back to the "Ivory Tower" executives at Delphi's Headquarters. Because of KBI's (HHI) low overhead, that dollar number would drop to $5,000,000 leaving $45,000,000 in profit. Blame the Union for potential closure when making a huge profit--hardly.

KBI filed legal action against GM in 2011 for purchasing bearings from Asia (same bearings we were contracted to make) and KBI won. Congrats to KBI for drawing a line in the sand. Generous Motors is now retaliating by not renewing future contracts and preventing KBI from seeking new business due to Generous Motors continued subsidization of employee wages (new work can not be sought until 2015 subsidization expiration).

The answer. The Local and International Union, as well as politicians, should be knocking down the door of Generous Motor's top executive's door demanding KBI can seek and engineer new business for the KBI plant beginning immediately.

The Hero Zone's picture
The Hero Zone

An unfortunate turn of events, but what can be done? I will certainly be all ears at the Commission meeting as this is going to be a learning opportunity and hopefully cause for a lot of critical thought. For a variety of reasons manufacturing isn't what it once was. It is a societal shift and one that requires a holistic approach.

Do you suspend laws requiring the lowest bidder for public contracts, or certain fiduciary responsibilities in a private setting?

Do you ban loss-leader products/bids?

How do you encourage manufacturing broadly or even locally? Especially in an auto industry where manufactured parts themselves are made to last longer with less maintenance. You can't order them to be lower quality (I presume) for negligence fears.

How can demand be increased? Or, how can the model of the factory change to accommodate a changed buying environment?

Who is strangling who and how do we untie the knot? Management/business practice? Government/regulations? Unions/negotiations? All three in some kind of rock-paper-scissors kind of way?

Can something else be manufactured on the site either by KBI or if they aren't sing all of their facility can they have a...how to put this...kind of like a manufacturing "flea market" or maybe a "manufacturing mall" is better where people can come onto the property which presumably meets all safety standards, etc. and make mini-companies within the structure?

The answer may very well be outside the box, too. I don't know how much a bearing costs vs. retails but let's say it's $1/each. Could they just stamp a "thank you" on a bearing and sell it to me so I can choose to support the cause? You know, kind of like a "Live Strong" wristband thingy?

What does our local community need? After all there are only so many cars on our roads and not all of them share the same kind of bearing needs. What else can they manufacture or fabricate? I proposed a fund raising idea to the city manager earlier this year to have the municipality make and sell items to enhance neighborhoods.

For instance, there are many old hitching posts throughout Sandusky and other areas. Could they manufacture somewhat uniform posts with some customization and sell them as a revenue generator for not just the business but the city? Maybe all the money goes into a sidewalk fund or the like? You could order yours with a few options such as name, material, and between a few designs. Heck, maybe even give an electric option with either/both a light or a charging station for cars (the cord would be like the lead horses used to be tied to out front). That would spur electrical work too and the streets would have a classy look with new sidewalks!

Hopefully some of this helps or at least gets other people's minds who are greater than mine going to support, poopoo, or modify what's out there. With over 76k people in Erie county alone presumably there are solutions that can be entertained.

The Hero Zone's picture
The Hero Zone

Additional thoughts: what about doing some kind of urban farming, space available? Hydroponics? Something supplemental. Or something with less longevity to be made. Museum? Trade school lab and/or branch? Really trying. What is clear though is that we as a community can't wait for a political handout nor for an Uncle Pennybags. We have to meet our own needs as best we can to produce for ourselves as much as we can.

Yellow Snow

Manufacturing facilities will always be full of residual chemicals used in production processes and the products itself. That becomes a liability for use other than manufacturing. This will most likely limit potential use. It's part of the reason these buildings sit empty, only to be demolished years later.

The Hero Zone's picture
The Hero Zone

This is true and I know that sting personally regarding former business hampering future. While not certain of all the details from what I understand "urban farming" uses techniques in a city or brownfield environment that still make safe food to eat. Hydroponics is a closed system and could be safer and easier to harvest at waist level. Maybe they can put up solar panels and wind turbines to be an electricity farm?

margaritaville88

Great thoughts Matt, I like the 'thinking mind' such as yours..well said

Stop It

I could care less about ANYTHING related to the U.A.W.

Webster

With the two tier pay of the UAW, why not move to a Right to Work State, wages the same as the new UAW scale without the high UAW dues and still employing Americans. Indiana and now Michigan which just became a Right to Work State not to mention most of the southeast U.S. with a better climate and lower cost of living. BMW has hired more than 7,000 in South Carolina along with additional related employment with related industries. The UAW leadership sold out the new workers to protect themselves and the hacks.

kURTje

Comment away..soon you too can be with more crime, & less services. Some of those organizations I know made a profit; but hey - it never is enough.

Contango

Re: "The group wants local governments to approve resolutions asking General Motors and other potential customers to bring new business to the plant."

A govt. resolution 'asking' for new business?

Reads like a David Copperfield approach.

How about proposing a tax free zone?

An outside-the-box idea:

http://www.freemansperspective.c...

The Big Dog's back

Did you read the article? The other company is "dumping" their parts here. The employees could work for nothing and still not be cheap enough.

2cents

And during the U.S. Tsubaki strike I read right here in these forums, two of the strikers having a conversation about the strike while they both were shopping at Wal-Mart! Talk about a place that backs any US manufacturer, NOT! Too f-in stupid.

SamAdams

Business is, by its nature, competitive. If somebody else can provide a product of comparable quality but sell it for less, then I'm sorry, but you need to change YOUR business model not whine that you're losing bids!

That being said, it's not "competition" when a would-be competitor "dumps" super cheap products below cost just to take the business. I don't believe that government should have a role in much where business is concerned, but that's one instance where an investigation SHOULD be done, and action SHOULD be taken if the allegations prove true. I feel that way whether the company is U.S. based or not.

It would truly be a shame for the area to lose still more decent jobs. I'd point out, though, that the business model utilized by some of these UAW facilities is all about the money and benefits for union members and retirees above all else, and that any businessman KNOWS that's unsustainable after a certain level is reached!

Should the government step in if somebody is taking illegal steps to get more business? Yes. Should the government step in if greed on EITHER end of the scale is causing a company to fail? Nope, not unless the greed involves embezzlement or the like. I'm not blaming the UAW outright here because I don't know what or how the money is working behind the scenes right now. Let's just say that, if the UAW is mostly to blame, it wouldn't be the first time!

AnAmerican

Well said

Yellow Snow

Use SR search function and type in "KBI lands sale, a windfall for Erie County" it is from 2010.
A lot of interesting information in the article. It states Kyklos is a subsidiary of Hephaestus Holdings. If this plant closes, it has more to do with the fact it's owned by a holding company than the fact is is Unionized. That is what holdings companies do. They stick around long enough to drain maximum profits, and instead of investing in the business and people, they leave, they have no intention of long term. Three to five years, seven if you're lucky. They bleed a business. Being owned by a holding company is not good for anyone. They invest very little into a company, so this time it will be even more difficult to attract a new investor.
This is more like a rental unit.
If this plant closes, some workers will survive, others will become dependent on tax-payer handouts through no fault of their own.
If you're not a registered voter, do it now. Fall is nearly here already.

Contango

Re: "They bleed a business."

And they would want to destroy any possible re-sale value of an asset why? Makes no economic sense.

Warren Buffett's Berkshire Hathaway for one is a "holding co."

Yellow Snow

If I make XXXXX profit and lose XX on the sale of my business, yes. I went through this at a factory I worked at. They implemented programs to involve the workforce in how to save money for the company. Who better knows how to do a job efficiently? Then comes a program called 5S. That program is basically about good housekeeping, organizing, and getting rid of what is no longer used. Then you paint and pretty it up. Sounds lovely, doesn't it? And it is, the facility is eye-candy appealing to a prospective buyer. A freshly cleaned and painted facility. They took our cost-cutting idea and implement them at the Mexican and China facilities now.

Contango

Re: "They took our cost-cutting idea and implement them at the Mexican and China facilities now."

Reads like you had a job and were compensated during the process.

What is it that you think that the owners owe you?

Yellow Snow

We gave them the tools to be competitive, we took major concessions, including wage cuts, profits increased. Our engineers worked on cutting edge innovation of our product. The sales people did what they were directed to do, send our technology and innovation to Mexico and China, very little to the US. They used your and my tax money to move equipment to Mexico. This is all monies that should be spent here. My purchasing power went down, more money and taxes that belong to both you and me.
What did they owe me? Honesty.

Contango

Re: "This is all monies that should be spent here."

Good luck corralling the flow of capital.

Mfg. IS returning to the U.S. from places like China, however robots are replacing people.

---------------------

Re: "What did they owe me? Honesty."

And you would have put exactly the same amount of effort into the project?

Yellow Snow

You want to repo my car? OK, let me fill the gas tank first. Want to re-po my house, ok let me clean it for you first, want a divorce, OK, you should keep 80% of everything, I'll give you more if you'd like it more. Want a job that I've done for 35 years, yeah, I'll act like a floor mat for you.

The Big Dog's back

Good luck trying to get through to CONtangled.

grumpy

You OWNED your car, house and possessions of your marriage. What part of the business did you own?

Were you paid for your working there? Did you have a contract with the company where there said they would be there till you retired? Were you paid to paint and clean up the plant? Did the company have a contract with you that didn't allow you to leave or look for a different job?

You were allowed to look for a different job. The company was allowed to look for better conditions for them to have a plant elsewhere.

2cents

Our fed could help by bringing the $$ back on shore. And on this chart I do not see China, why, communist.

http://www.project.org/images/gr...

http://www.nytimes.com/2013/06/0...

4shizzle

"Our fed could help by bringing the $$ back on shore".

.......NOW you want government intervention.

Rationally Speaking

After reading the article, I looked at some of the manufacturing plants and company holdings of major corporations. Why is it that the plants in Ohio are being consumed by other companies who operate plants in other states and then closed? Its happening to Ohio and Michigan. No wonder they call this the Rust Belt.

Are our states unfriendly to business? Ohio has the Commercial Activity Tax which was explained to me that it was a tax for the privilege of doing business in Ohio if ANY business or service makes more than $150,000/year. (The CAT is an annual privilege tax measured by gross receipts on business activities in this state. (http://www.tax.ohio.gov/commerci...)). Now the Patient Protection and Affordable Care Act (PPACA)(Obamacare) which is encouragement for employers to cut full time positions to part time positions. Where do they think all this money is coming from? Federal, state, and local taxes and fees come out our pockets. Each entity takes a penny here and there, and the common statement is that its only $XX per person or home or business. Is the government so in tune with spending and taxing that business can't afford succeed in this country?

Are our labor demands to high? Is our labor force focused on union jobs with high pay and benefits? It seems that in order to get into a factory around here, you have to know someone in the union.

Do we need to promote something other than factory jobs and tourism? Are our youth being trained for careers, job interviews, economics, etc.. Where are good paying jobs that don't require a college degree. Not everyone can afford to go to college, but can they attend some affordable technical training.

What is needed to keep this country a leader in the private and public sectors? Everyone needs to work together but how? The government doesn't listen to the people. They listen to minority factions and pass laws which requires more taxes and more regulations which increases their product/services costs. Every time a new regulation goes into effect, taxes inevitably increase. A penny here and a penny there adds up. Employers/businesses/manufacturers are in the business to make a profit for their owners/shareholders. Another penny. The unions are looking out for their membership. They get raises, which raises their employers costs, and puts a bigger disparity between their membership and the rest of the work forces. Another penny.

How many pennies before you go broke?

kal-el

Good for business usually means bad for workers. Why do you think Mexico and China are such attractive destinations for US businesses? Why do you think Texas is such an attractive destination for jobs and has one of the highest rates of min wage jobs and the lowest percentage of workers covered with medical insurance?

The CAT tax was a Republican idea that replaced personal tangible property tax in Ohio (which, despite the name, is a tax on business inventories). It was supposed to make Ohio more business-friendly. Unfortunately, your local schools relied on that tax revenue, and that's why you see schools on the ballot more often -- another shift of taxes t the shoulders of local residents, who, in turn, have fewer good-paying jobs.

Contango

Re: "Good for business usually means bad for workers."

And bad for business usually means NO jobs.

Unionization worked well for MI eh?

And public employee pension plans invest assets in foreign countries, hedge funds and private equity firms WHY?

Pages