As expected, the new Schaeffler Group (Germany, parent of INA and FAG Bearings) bearing factory in Irapuato, Mexico will result in a corresponding loss of jobs in the United States.
Initial production at Irapuato was celebrated last month in a major ceremony attended by corporate executives and Mexico's political elite.
Irapuato will manufacture bearings, engine components and chassis components under the INA and FAG brands, eventually employing as many as 400 workers.
But much of the work being done in Irapuato is being shifted there from the INA Bearing plant in Spartanburg, South Carolina, with a corresponding loss of jobs.
Schaeffler has repeatedly warned that it believes shifting production to Mexico is the only way it will be able to remain competitive in the North American auto industry going forward.
Inherited via its 1987 acquisition of Andrews Corp., INA Spartanburg manufactures ball bearings, needle roller bearings, and engine components for North American OEMs. The nearby BMW plant is not among its customers.
At the Irapuato plant opening, Ms. Schaeffler said: "In recent years, Mexico has undergone a remarkably dynamic economic transformation. Today, with one million in annual vehicle sales, Mexico not only represents Latin America's second-largest automotive market, but also constitutes a vital manufacturing base for North America, as two million cars are produced here every year. Mexico's contributions are a key factor in the success of the Schaeffler Group and the company is committed to nurturing this trend."
It can't be argued that INA Spartanburg has been successfully competing in the automotive market. Employment there has been hit hard by falling automotive demand and production; not long ago, the plant employed nearly 500 workers, and 400 as recently as 2007. Today, that number is well under 200 and falling.
Approximately 120 workers, or two-thirds of those now remaining, will be put out of work as production moves to Mexico over the next several months. INA had already filed notifications for 105 layoffs from August through October. Its latest notification indicates an additional 119 could be laid off as early as January 10, 2009, but in fact may drag out through second quarter 2009.
For now, INA Spartanburg is expected to remain open once the Irapuato work is gone, with a skeleton crew of approximately 60 workers producing linear bearings.
Spartanburg's laid off workers will be given a severance package and employment assistance. Greg Tinnell, VP of HR, said: "It is very unfortunate that we are having to do this just to be competitive. We will do everything we can to provide our employees with other opportunities in our company or with other employers."
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