GREENFIELD – A car parts manufacturing plant in Greenfield, heralded during its opening a few years ago as an economic boon to the city, is restructuring after suffering workforce and supply setbacks.
China-based BeijingWest Industries, or BWI Group, opened its first U.S. production facility in 2019 at 989 Opportunity Parkway on Greenfield’s north side, where it makes shock absorbers. The company invested about $41 million in its building of about 275,000 square feet along with $44 million in equipment and $11 million in other assets.
BWI executive Greg Dronen recalled the facility starting off with main customers General Motors and Ford, as well as original plans to have over 440 workers in Greenfield by the end of 2021.
“The concept was that we had an abundance of workforce and good, hardworking laborers,” Dronen said earlier this month at a Greenfield City Council meeting, where he addressed the company’s inability to comply with goals set out in tax breaks the city previously approved.
Dronen recounted initial hourly wages of $14.54 for operators, $15.70 for production control and $18.40 for maintenance.
“Run that forward to the current position – we are losing over $30 million a year,” he said. “It’s a huge drain on us, and some of the reasons are the workforce, the labor availability. We’ve literally had to go out-of-region to find laborers.”
The current labor rate BWI contracts for is higher than those initial wages – $17.18 for operators and $17.78 for production control, with maintenance running from $20 to $36 an hour. Dronen said the plant also offers an attendance bonus if employees make it on time to work every day for a week – an additional $5.50 to $6 an hour. Only 70% of workers get that bonus, he added.
Compounding the struggles are cost factors that continue to mire the economy, from raw materials to fuel. And BWI’s contracts with companies it receives equipment from are not opening back up anytime soon.
“So we’re squeezed in the middle,” Dronen said. “We got fixed pricing on this end, and inbound costs and labor coming up on that end.”
He noted one part used in the plant’s manufacturing process used to cost 27 cents. Now it costs $54.
The challenges follow those from the COVID-19 pandemic that hit the area in March 2020 and the way a persisting lack of semiconductors continues to hamstring the automotive industry.
To adapt, BWI has decided to change its model.
“We are not going to manufacture what you might call a lower-end product,” Dronen said. “It doesn’t mean it’s defective, it just means it’s not as expensive.”
Instead the facility will shift its focus to a more expensive product.
“We will continue to sell to Ford and GM out of this plant, but we’re restructuring which type of products we’ll be selling,” Dronen said. “Rather than sell the lower-end, everyday shock absorbers, we’ll sell the higher-end…”
BWI’s local workforce will also decrease. Dronen said the plant is currently pushing 280 employees, a total that will drop to about 125 by late 2022/early 2023. Many of the employees are temporary workers on contract, he added.
“BWI is committed to stay here, and we’re looking forward to a new portfolio, and our goal is to add business in the next five years,” Dronen said.
Greenfield Mayor Chuck Fewell was sympathetic to BWI’s struggles and grateful for its transparency. He pledged to help the company determine how its tax breaks would be administered moving forward.
“We’ll look at it, because it’s going to be readjusted, and it needs to be beneficial to you, and has to be protected to the city,” he told Dronen.