Business Looking for GM Business

Nov 27, 2010 (Kokomo Tribune - McClatchy-Tribune Information Services via COMTEX) --
Hundreds of Kokomo workers could avoid losing their jobs if General Motors Components Holdings is successful with a new business strategy to broaden its customer base, the company says.

The subsidiary of General Motors is seeking contracts with companies other than GM and Delphi Automotive, which were exclusive customers, Kent Eaton, personnel director for GMCH Kokomo Operations, said Friday.

"It is something new for us," he said. "GM is giving us the opportunity to pursue new business. The main reason is just to expand our portfolio."

The facility, which has about 700 hourly and 300 salaried employees, with some in Michigan, could have to undergo some retooling or retrain its employees to accommodate new clients' needs. The company would make those changes once it cemented deals with customers instead of making new investments before hand, Eaton said.

GMCH has formed a team of managers dedicated to expanding the company into industries such as automotive or telephone. The company is also considering selling into the computer industry, except for microprocessors because GMCH's technology isn't advanced enough, he said.

The company has yet to sign any contracts with prospective customers, Eaton said.

"We've talked to a lot of different people," he said. "One of the things in our favor, there is a shortage of semiconductor production."

GM in July announced it was "assessing its business model" at GMCH Kokomo, leading employees and the community to question the future of the facility. Automotive analysts at the time said the technology, notably the chips produced by the few hundred employees at the FAB III line, were becoming "outdated."

The life of the portions of the GMCH plant that remain in use should extend several years if the business plan is successful, Eaton said Friday.

"That's why we formed this team," Eaton said Friday, "to make sure we can retain the jobs we have. The next couple of years we have a pretty solid business plan. ... The longevity depends on the contracts we receive."

William Cory Stanley, the president of United Auto Workers Local 292, stated in an e-mail he thought the company was doing something positive by trying to find new customers. But he had some concerns because of the facility's history of only producing for GM or GM products.

"It is also evident that they won't let us build anything that is a competitor with GM or even Delphi," Stanley wrote. "We are forced to find new business in an adjacent market and this has its challenges. We also face many challenges when it comes to the design work on any proposed new business. We weren't left with much in the area of engineering design capabilities after our split from Delphi."

Stanley continued to state one of the union's largest "hurdles" was to retain or bid on new jobs because of possible wage and benefit concessions. He noted the union took a 50-percent wage cut three years ago.

"We continue to face some very large hurdles in our pursuit of new business," he stated. "I continue to believe that we can come to an agreement that will help us achieve success. This will take more than our willingness to give concessions. This will take both parties wanting Kokomo to survive. I'm still not convinced that everyone is on the same page when it comes to our survival."