A Boteoturt County auto parts plant will close by February.

JTEKT made the announcement to employees in Daleville Friday. All employees will get severance packages and incentives as the plant phases down production. The facility employs about 260 people. Some will be offered transfers to plants in Texas and Tennessee.

The company's plants are operating at 35 to 65 percent of capacity, a situation that is not financially sustainable, according to the company.

Here is the full news release:

JTEKT Takes Measures to Align Capacity and Demand

Daleville, Virginia, July 10, 2009: JTEKT North America (JNA), a leading automotive supplier, announced today that its Daleville, Virginia facility will end operations during 1st quarter 2010. Today, Michael Bowers, JNA Vice President of Operations, told Daleville team members that the decision was made to ensure the long term operational and financial success of JNA operations throughout the U.S.


Bowers explained that the majority of the Company's sales are to automotive manufacturers, which over the last 12 months have experienced an unprecedented decline in sales.

Prior to today's announcement, JNA had already undertaken broad actions to reduce costs and adjust to lower sales, including:




Elimination of contingency staffing,
Establishment of a hiring freeze,
Reducing overtime,
Substantially cutting spending,
Implementing creative work schedules and offering voluntary time off,
Freezing wages and salaries,
Offering voluntary furloughs and voluntary early retirement,
Eliminating contracted services or replacing them with JNA team members,
Reducing capital spending and inventory, and
Furloughing team members.
Unfortunately, even though these actions were taken, the dramatic decline in automotive sales and the restructuring of automotive manufacturers due to bankruptcies and a weak economy resulted in a major imbalance between manufacturing capacity and sales for the Company. Currently, JNA's manufacturing plants are operating between 35% and 65% of capacity, a situation that is not financially sustainable.

In his comments to Daleville team members, Bowers stated, "Automotive will recover, but that recovery is expected to be prolonged and the Company's business situation doesn't allow it to wait. To ensure long term competitiveness and business stability for our team members and customers, a very difficult decision had to be made to eliminate excess capacity and adjust to weakened sales." The Daleville plant has been in operation since 2001 and, according to Bowers, its team members have worked diligently to meet the demands of their customers and local government could not have been more cooperative and supportive, especially Botetourt County. Bowers explained that based on over powering business needs, the Company was left with no viable option other than to begin the phase down of operations at the Daleville plant in October 2009, with the plan to end all operations by February 2010. JNA will consolidate steering production into plants in Tennessee and Texas, offering some Daleville team members employment at those locations.

JNA remains committed to serving its customers until closure of the Daleville plant, and to assisting its Virginia team members as they transition to new employment. The Company will provide a severance package to all team members. In addition to assisting team members in securing unemployment benefits provided by the State of Virginia and the Federal stimulus program, JNA will provide financial support equal to 13 weeks of pay, will extend medical and dental insurance coverage for three months after plant closure at no cost to team members, and will provide further financial support in the form of a monthly incentive. The monthly incentive will allow team members to earn additional income during the plant phase down period when performance meets targeted levels.

JTEKT North America is a tier one supplier of steering systems, driveline components, and bearings to North American Automotive Manufacturers. It currently employs over 2400 team members in North America at sales offices, technical centers, and eight manufacturing locations in Virginia, South Carolina, Tennessee, and Texas.

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