Kokomo Tribune; Kokomo, Indiana

January 3, 2013

Steel Parts could close in Tipton

Union, company in negotiations

By Ken de la Bastide
Tribune staff writer

TIPTON — For the third time in seven years the Steel Parts Manufacturing facility in Tipton is on the verge of closing.

Company officials notified the Indiana Department of Workforce Development Dec. 27 it expects to close the Tipton facility permanently on March 14.

“Steel Parts expects the entire facility will be closed and all employees will be laid off,” Mike Smith, Human Relations Director for Steel Parts, wrote state officials.

The notice to the state indicates the company has offered to negotiate with United Steelworkers International Union Local 3875 in an effort to prevent the closing or all or part of the facility.

Union members reached an agreement with company owners in 2006 to prevent the closing of the plant and again in 2009.

Monomoy Capital Partners purchased Steel Parts in 2011 from Resilience Capital Partners. The Tipton plant is a 185,000 square foot manufacturing facility and employs approximately 200 people.

Smith did not return a telephone call Thursday seeking comment.

Scott Sigler, president of Local 3785, said the union was notified of the company’s intention to close the plant the week before Christmas.

The current contract doesn’t expire until 2014 and the company is looking to negotiate a new agreement with the union.

“We have started the process,” Sigler said of negotiations with the company. “We met tentatively and another meeting is set for Jan. 21.”

Sigler said the company presented a proposal to the union and a counter offer will be presented at the Jan. 21 meeting.

“The company wants a lot for us to keep our jobs,” he said. “There are pay and benefit cuts, stripping on union and seniority rights.”

Of the 174 people who work in manufacturing, 146 are represented by the union.

“This is well beyond what we went through in the past,” Sigler said. “They were serious pay cuts.”

Sigler said Steel Parts has a ton of work at the Tipton plant indicating Ford is the number one customer, followed by General Motors. He said the plant manufactures clutch plates.

“We knew something was going on,” Sigler said. “They recently bought a Raybestos plant in Sullivan. They are looking at moving manufacturing to Sullivan.”

Sigler said the company had summer help set to expire Labor Day and instead 12 of the 28 people were hired full time. He said the company was looking at adding more full-time employees in the first quarter of the year.

There is currently a two-tier wage system in place with new hires receiving 75 percent of the pay for the first five years.

“We’re trying to do our best,” Sigler said of the negotiations. “We met with our members and in my opinion if the company wanted a lot of money in concessions to keep the plant operating it would not happen.”

Sigler said it’s hard to be optimistic about keeping the plant open.

“It won’t be saved unless the owners want to keep a facility here,” he said.