By Joseph S. Pete, Daily Journal of Johnson County staff writer
jpete@dailyjournal.net
More than a dozen General Motors plants will be shut down for several weeks between May and July, but the effect on local auto suppliers isn't clear.
The idling of GM factories could have a major impact on the local economy and auto suppliers throughout central Indiana who already are struggling because of weak demand for new cars, trucks and sport utility vehicles, according to an IUPUI economics professor. Johnson County auto suppliers already have laid off workers, ended shifts and even suspended production.
What impact the General Motors shutdown will have isn't known, but many of the county's auto suppliers do much of their business with Japanese automakers. Idled workers for local auto parts makers that already have slowed production might be out of work for longer as a result, Franklin Mayor Fred Paris said.
Major GM suppliers have shut down or suspended production at plants in the county in recent years.
Last year, International Automotive Components, which made door trim and instruments panels for GM and Chrysler, shut down its Edinburgh plant, which employed 400. In 2004, ArvinMeritor shut down its air and emissions manufacturing facility in Franklin, which had about 850 employees and depended heavily on GM and other domestic automakers.
Mitsubishi Heavy Industries Climate Control shut down its Greenwood facility last year after it was unable to replace a canceled contract with GM. The company now plans to suspend production at its Franklin plant this summer until economic conditions improve.
Other Johnson County auto parts makers do business with GM. Nachi Technology in Greenwood makes bearings for passenger vehicles, and Casting Technology Co. in Franklin makes lightweight aluminum parts, such as steering knuckles.
A spokeswoman for Monomoy Capital Partners, the private equity fund that owns Casting Technology, said the company has no comment at this time about the GM idling.
Nachi company officials could not be reached for comment.
NSK should not be affected by the shutdown because its two Franklin plants do no direct business with GM, human resources director Chris Swartwout said.
The company already cut its second shift and laid off temporary workers this year because of a decline in demand from the automakers the company supplies.
NSK produces bearings for automakers at its Franklin plant, but it hasn't supplied to GM for at least a few years, Swartwout said. NSK Precision America makes ball screws and other products for manufacturers, including those in the automotive, medical, semiconductor and machine tool industries.
Some of the automotive suppliers that NSK makes ball screws for potentially could suffer from the GM shutdown, but that shouldn't have much of an effect on NSK's bottom line, Swartwout said.
"The effect, if there is any, should be insignificant," he said.
KYB, another major auto parts maker in Johnson County, does little to no business with GM.
GM does have 5,000 workers in Indiana, and the shutdown could result in layoffs at suppliers throughout central Indiana, said Kyle Anderson, a professor of business economics at IUPUI.
"Sales have been down significantly, and they need to take drastic steps to cut costs," he said. "Unfortunately, it's going to spill out into other sectors because of all the households that will be affected. But they're in bad shape, and they're losing market share because people don't want to purchase a new vehicle that has a commitment of five to six years when there are questions of whether they will still be around."
GM and auto parts suppliers traditionally idle workers for a few weeks in the summer, so the Indiana Department of Workforce Development is prepared to handle the expected increase in unemployment applications, spokesman Marc Lotter said.
Manufacturing workers will be out of work for about seven weeks longer than normal, which will put a fiscal strain on the state's unemployment fund but will not create any problems receiving or processing unemployment claims, he said.