TRAVERSE CITY -- The slumping automobile industry will victimize hundreds of local workers for the second time this year when Tower Automotive LLC shuts its Garfield Township auto parts plant.
The impending shutdown, confirmed Friday by the Novi-based auto parts manufacturer, will impact around 318 hourly workers at the plant and another 40 salaried workers. Forty-five workers already have been laid off.
It's the second major auto parts plant to close in northern Michigan in 2008 because of the nosedive in the auto industry, joining Dura Automotive in Mancelona, where around 300 workers were idled.
Tower workers said the news was delivered in a plant meeting shortly after 9 a.m. Friday. For most, it wasn't a complete surprise.
"In a way, you could see the writing on the wall," said Ralph Haynes, an automatic press operator who's worked at the plant for 16 years. "We've been losing a lot of work lately."
Haynes, 40, said company officials didn't indicate if any of the Traverse City workers would be relocated elsewhere.
"They haven't said anything," he said. "All they said was the work here is going to various plants."
Company spokesman Joe Kirik said the shutdown is limited to the Traverse City facility, but wouldn't comment on why the local operation was targeted.
"It's not something the company will discuss," he said.
Workers took the news hard, said one 11-year plant veteran.
"We're just numb," the woman, 39, said. "Some people are crying, some people, it's still sinking in ... It's not a good way to start your day."
Joe Williams, of Traverse City, an 11-year employee, said word filtered through the plant recently that its future could be in doubt.
"There were rumors ... we were kind of wondering if it was going to be coming down," Williams said. "It does kind of hurt, for as much work as we've done for the company."
Sarah Jones was heading in for her afternoon shift and received the bad news from friends who'd picked it up through media reports.
"I'm kind of mad that I had to hear about it from everybody else that doesn't work here before I found out," said Jones, who's worked at the plant for 21/2 years and doesn't know what she'll do next.
"It's not good, I know that much," she said. "I need my health insurance from here bad."
The shutdown was blamed on "reduced automotive industry demand in North America" according to a statement issued by the company.
"These are difficult decisions, particularly because they affect our hardworking colleagues, but they are a necessary part of responding effectively to rapidly changing market forces," said Bill Pumphrey, Tower Automotive's president of the Americas.
Kirik said Tower has not determined a specific date for the plant's shutdown. The company said production will be consolidated into other Tower facilities in the U.S., with the transition to be determined "within the next few weeks."
The Traverse City plant produces small stampings and assemblies for various auto companies.
The decision to close the Traverse City plant was not impacted by the recent free-fall in the U.S. financial and credit markets, Kirik said, but rather the extended downturn in the automotive industry. The company's largest client by revenue is Ford Motor Co., which slashed vehicle production by 15 to 20 percent in the second and third quarters of 2008.
Tower Automotive Inc. filed for Chapter 11 bankruptcy reorganization in February 2005. It emerged from bankruptcy in July 2007 as Tower Automotive LLC, an affiliate of Cerberus Capital Management LP, one of the largest private equity firms in the country. The company closed or sold 16 manufacturing plants during the restructuring and consolidation production among its remaining facilities.
Hourly workers, represented by United Auto Workers Local 5110, were covered by a five-year contract that expired next summer. They expected the company to press for wage and benefit concessions in upcoming contract talks, but won't get a chance at the negotiating table.
"I thought (with) this coming contract, we'd end up paying a lot more," said employee Darwin Roberts. "But now they're just pulling it out and shutting the doors."
Tower employs more than 11,000 workers in 39 plants in 13 different countries. It reported revenues of around $2.5 billion in 2007.
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