About 200 local employees of Cape Girardeau's Dana Corp. plant learned Tuesday that they'll be out work in 18 months -- some even sooner -- when the plant shuts down and the jobs are sent to Mexico.
Employees at the auto parts manufacturer were disappointed Tuesday but not shocked. Dana filed for bankruptcy in June and then announced in November its plans it to close eight facilities and downsize three others. Four plants were named in Tuesday's announcement: one in Syracuse, Ind., and the other two in Ontario, Canada.
"We knew they were closing some, but we're still surprised because we make good quality parts here," said accountant Beth James, who has worked for the company since its local plant opened on Southern Expressway in 1990. "We think we're one of the more efficient, higher quality companies. It does make it frustrating."
Company spokesman Chuck Hartlage said the closings are necessary as Dana rebuilds from Chapter 11, brought on by lagging U.S. auto sales, high fuel prices and increases in material costs. Couple that with the lure of cheaper Mexican labor, and the decision was unfortunate but vital to a successful reorganization, Hartlage said. The Cape Girardeau plant is scheduled to close its doors in June 2008.
The work done at the Cape Girardeau plant -- producing axle components -- will be consolidated into operations the Toledo, Ohio-based company already has in Mexico. Hartlage would not say why the individual plants were chosen for closing.
Closing the plants, eliminating health benefits and reducing other labor costs should save between $405 million and $540 million each year, the company said.
That was no consolation to employees Tuesday, who worried about looking for work in an unstable job market and complained about big bonuses for Dana's top executives. A U.S. bankruptcy judge last month authorized Dana Corp. to pay its chief executive and five other top executives up to $11 million in bonuses if they succeed in boosting the bottom line.
Anthony Brendel, 38, a calibration technician at Dana, said some frustration was expressed during a question-and-answer session between employees and management Tuesday.
"They were wondering why the CEO, Mike Burns, gets a $2 million bonus and we're here in Chapter 11," Brendel said. "And they couldn't answer that question. It's kind of hard that we're going to lose our jobs in 18 months and the CEO keeps getting these million-dollar bonuses."
Brendel, who has worked for the company for more than 12 years, said employees have been kept in the dark about some specifics, such as exactly when the jobs will vanish.
"We have no idea," he said. "We have been told if you still want to work for Dana, you can put that in there and with any job openings you'll be considered. But with everything being downsized who knows what openings there will be. There are still four plants to be closed. Our closest plant is Columbia, Mo., and they might be on the chopping block themselves," he said.
Others said management told them last month hard work might save their job. They now wonder whether they were hanging on to false hope.
"They gave us hope that we would stay open," said Shawn Dement, who has worked in the plant as a technician for four years. "They said be as efficient as possible because every little thing could determine whether we stay open or not."
Plant manager Mike Grebing said information is sketchy and is still coming in. Grebing has been with the plant since it opened and became manager earlier this year. He declined to comment on his future with Dana but said some opportunities existed for a number of employees to relocate. He acknowledged that option probably wouldn't be practical for many employees, especially considering the closest plants are in Columbia, Mo., and Dry Ridge, Ky.
'Sitting on the bubble'
"We've all been kind of sitting on the bubble since the announcement," he said. "But I was definitely optimistic. And I know we were doing what we needed to do. But decisions like this are based directly out of corporate without our input."
Grebing believes the layoffs will come in phases but didn't know when the first round of layoffs would take place.
Hartlage, the company spokesman, couldn't confirm that the employees would be offered severance packages. Severance packages differ from facility to facility. In the case of the Cape Girardeau plant, which is operated by union labor, the packages would be determined by negotiations between the union and the company. The Cape Girardeau plant largely employs machinists, engineers, quality control and human resources staff.
Cape Girardeau Mayor Jay Knudtson was disappointed but said the move was expected.
"There is no way we can pay a fair wage to these workers in Cape Girardeau and even come close to competing with the production and output they can produce in Mexico," he said. "Quite frankly, it gives me a bad feeling in my stomach that these companies that have become successful within the borders of the U.S. are moving outside of our borders now for financial reasons."
Knudtson added that unemployment in Cape Girardeau is under 4 percent and hoped the buffer of more than a year's time before the closing will give workers the chance to find new jobs.
John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce, said from all indications the Dana plant here was productive and profitable.
"What people need to understand is that the employees have done a very good job," Mehner said. "Unfortunately, they're part of a corporation that has absolutely struggled nationally."
Mehner said industrial development officials have a year and a half to come up with options for the building and the workers. One perhaps ideal option would be to recruit a similar auto parts manufacturer to take over the building and keep the employees on board.
"That's exactly what we're looking at," Mehner said. "Do you think they're the only company in the world that makes what they make? We have a lot of marketing potential for that work force and that building."
In the meantime, some employees aren't thrilled about getting back into the job market for the first time in years.
"You've got 17 years invested here, so you really kind of hate the thought," said engineer Duane Welter, 53. "You've been here so long it's kind of like 'What chance do I have doing something else?'"
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