GKN Closing All Three Michigan Plants

GKN Sinter Metals (USA, a subsidiary of GKN plc., UK) announced it is closing all three of its North American manufacturing facilities in Michigan -- Owosso, Romulus, and Zeeland. Nearly 300 employees will lose their jobs by the end of 2006 as the production is shifted to other underutilized and lower-cost GKN plants. Continuing troubles across the North American auto industry, GKN's primary customers for those facilities, led to the consolidation. In early 2004, GKN's North American operations began a program of shifting production to the most cost-efficient plants within its group. GKN did not comment if the production would shift to any of the remaining 14 facilities in North America, or to other plants worldwide. A challenge of shifting production overseas for key components such as GKN produces is maintaining contractually-obligated delivery schedules, and enough inventory to cover problem shipments. Owosso is a conventional powder metal manufacturing facility, obtained via the 1999 acquisition of Michigan Sintered Metals and its Kersey, Pennsylvania subsidiary, Metafusion, Inc. Owosso produces sintered seat belt latches, solenoid valve seats, and engine mounts for automotive body and chassis suppliers. It also produces office chair handle assemblies. Approximately 40 employees are in Owosso. Romulus is a powder forging operation. It was acquired from Borg-Warner Automotive in 1999, and is the leading producer of powder forged connecting rods and power train components for automotive OEMs. Over 170 workers are affected in Romulus. GKN spokesman, Larry Weiss, commented the plant had been dealing with declining production volumes over the past several years. Zeeland, to close by September, is a conventional powder metal manufacturing facility. It produces synchronizer rings and cones, ABS sensors and ball joints for automotive applications; pump components, transmission components and clutch hub assemblies for non-automotive applications. Approximately 70 workers are employed in Zeeland. Over 75% of GKN's sales in North America are into the struggling auto industry. Production volumes at the three plants have seen gradual but steady declines recently. Spokesperson Kristyn Godlew said, "We had been operating below capacity for quite some time." After the closings, GKN will have 14 facilities across North America, including its headquarters in Auburn Hills, Michigan. However, no manufacturing facilities will remain in Michigan. GKN is the world's largest producer of powder metal components. It was established by GKN plc's 1997 acquisition of Sinter Metals Inc. (USA). Sinter Metals had grown quickly via aggressive competitor buyout strategies. Since acquiring the business, GKN has continued the aggressive consolidated growth-by-acquisition strategy, acquiring 14 other companies.