Auto plant gets its bearings

Former New Departure and Delphi factory will operate at least until 2016.
Melissa Topey
Aug 22, 2013

 

Kyklos Bearing International, which occupies the former New Departure and Delphi facility at Hayes and Perkins avenues, will continue to operate until 2016, according to union workers there.

Dominic Takacs, a representative of the local United Auto Workers, said KBI management Wednesday morning announced they had accepted a General Motors contract to manufacture wheel bearings for the Chevy Camaro and Cadillac SRX.

The Hail Mary is a move called “a right of last refusal,” in which KBI agrees to match a competitor’s low bid of $28 per bearing, Takacs said.

KBI did not confirm the arrangement, and multiple calls to KBI general manager Gene Biroth went unreturned.    The work at the facility should continue through 2016, Takacs said. “It gives us more time to fight,” he said.

Earlier this year, KBI laid off 58 employees amid fears the plant would lose all General Motor contracts by September 2015. Employees and union representatives have said KBI cannot remain competitive with overseas manufacturers who are accused of “dumping” bearings into the U.S. market.

The matter has been further complicated by a federal judge’s 2008 order in the Delphi bankruptcy proceedings. The judge ordered General Motors to subsidize the KBI payroll until 2015, which means General Motors pays for anything more than $26.50 an hour per worker, including the cost of benefits.

KBI management is hindered from accepting outside contracts during the subsidy. Wednesday’s news gives the local facility a one-year extension to secure future work.

Amy Sartor, a seven-year employee, said Wednesday’s meeting was a relief to employees.

“It’s good news,” she said. “I hope it will keep people working. I hope this will allow us to continue the status quo.”

The announcement surprised Peter Zehringer, director of the Erie County Economic Development Corporation. “That is great news,” Zehringer said. “That’s encouraging.” Combined with the recently signed labor contract between KBI and the unions, this latest development would seem to indicate the situation is improving, he said.

“They are moving in the right direction,” Zehringer said.

Comments

The Big Dog's back

Good news!

Yellow Snow

You've a new lease to prepare for the worst, if the best happens you're further ahead. Get your financial house in order today. Hang Tough and best of luck to all.

queenjhb

2016, one more year, congratulations, wish you all the best. UAW stand strong.

KURTje

The best to all of you. Everyone benefits from this.

Fromthe419

Good news indeed, hope more work can be secured not only from GM, but other manufacturers as well.

bigdad1205

Good news ? You got a contract to sell bearings at a loss. Great business plan. Nothing like putting a band aid on a broken leg. As long as the government allows china to keep dumping bearings this company has no chance to survive.

grumpy

I had to read it a second time to get the sell at a loss thing, but when taking the subsidy into account I can see your point. There are a great many things for a business to consider when making such deals. I can see the "hail Mary" aspect of it with the limited facts we have from the media. We won't know, nor should we be able to know, all of the details of these contracts the business made.