Lear to lay off 110 workers
Saturday, May 12, 2007
By Chris KnapeThe Grand Rapids Press
WALKER -- Up to 110 people could be laid off beginning next week at Lear Corp.'s plant at 2915 Walkent Drive NW next week, workers at the plant said.
What's not clear is how long those layoffs could last.
The plant has about 500 employees making seating components.
"I don't know if this layoff is indefinite or permanent," said former United Auto Workers Local 2344 President Mike Baker.
"In the past seven years I've worked there, I haven't seen Lear not bring them back."
The company declined comment, a spokesman said.
The company did comment about the plant in September, however, when a spokeswoman talked about receiving a tax break from Walker based on investments in new equipment that were to add 36 jobs.
The status of those jobs is uncertain. UAW workers are laid off based on seniority.
Neither the state nor the city has received notification of an impending layoff.
Walker City Manager Cathy Vander Meulen would have to review the city's abatement agreement with Lear to see if layoffs might affect the plant's tax breaks.
"We have to look, if they are laying people off, at what the employment levels will be," she said.
Erich Merkle, an analyst with IRN Inc. of Grand Rapids, said Lear faces issues related to its reliance on the traditional Big Three and its still relatively high labor costs.
Although Lear is profitable, it has been restructuring to remain so. The company is being purchased for $2.8 billion by American Real Estate Partners LP.
"The position that Lear is in today is that they've got too much capacity," Merkle said. "When you start taking a look at the automakers and the dropoff in production and the cut that automakers are making with their capacity ... that also has to happen in the supply base."
Plants such as those in Walker are a challenge for any auto parts supplier.
The plant remained Lear's only plant in West Michigan after the Southfield-based auto supplier spun off its interiors business this month. Lear sold its 26 North American interiors plants to International Automotive Components Group North America Inc.; the interiors business has annual sales of $2.5 billion.
"It's going to be very difficult to keep any of those plants open like the one in Walker. You have to reduce your overhead cost structure because the revenue isn't there," Merkle said.
By Chris KnapeThe Grand Rapids Press
WALKER -- Up to 110 people could be laid off beginning next week at Lear Corp.'s plant at 2915 Walkent Drive NW next week, workers at the plant said.
What's not clear is how long those layoffs could last.
The plant has about 500 employees making seating components.
"I don't know if this layoff is indefinite or permanent," said former United Auto Workers Local 2344 President Mike Baker.
"In the past seven years I've worked there, I haven't seen Lear not bring them back."
The company declined comment, a spokesman said.
The company did comment about the plant in September, however, when a spokeswoman talked about receiving a tax break from Walker based on investments in new equipment that were to add 36 jobs.
The status of those jobs is uncertain. UAW workers are laid off based on seniority.
Neither the state nor the city has received notification of an impending layoff.
Walker City Manager Cathy Vander Meulen would have to review the city's abatement agreement with Lear to see if layoffs might affect the plant's tax breaks.
"We have to look, if they are laying people off, at what the employment levels will be," she said.
Erich Merkle, an analyst with IRN Inc. of Grand Rapids, said Lear faces issues related to its reliance on the traditional Big Three and its still relatively high labor costs.
Although Lear is profitable, it has been restructuring to remain so. The company is being purchased for $2.8 billion by American Real Estate Partners LP.
"The position that Lear is in today is that they've got too much capacity," Merkle said. "When you start taking a look at the automakers and the dropoff in production and the cut that automakers are making with their capacity ... that also has to happen in the supply base."
Plants such as those in Walker are a challenge for any auto parts supplier.
The plant remained Lear's only plant in West Michigan after the Southfield-based auto supplier spun off its interiors business this month. Lear sold its 26 North American interiors plants to International Automotive Components Group North America Inc.; the interiors business has annual sales of $2.5 billion.
"It's going to be very difficult to keep any of those plants open like the one in Walker. You have to reduce your overhead cost structure because the revenue isn't there," Merkle said.
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