HANNIBAL, Mo. — Automotive manufacturers in Marion and Monroe counties have been hit hard by the economic downturn and the slumping automobile industry.
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Pace Industries is closing its doors, and Intermet filed bankruptcy, and its assets were bought at an auction, leaving the future of the plants in Monroe City and Palmyra in doubt.
However, two area die-casting manufacturers have weathered the worst of the wild economic ride — Lakeside Casting Solutions in Monroe City and Spartan Light Metal Products Inc. in Hannibal.
Lakeside Casting Solutions has cut its employees’ hours, but none of its 24 workers has been laid off.
“That’s the decision we made,” Lakeside President Bob Lehenbauer said. “We didn’t want to have to lose anybody over the situation. We keep our staff so low to start with, and we do cross-training where everybody can do everybody’s job so it’s not so compartmentalized. We also took advantage of the slow time to do some added training for the future.”
Lakeside tapped into the Missouri’s Shared Work Unemployment Compensation Program to help workers when hours were reduced. The program allows an employer to divide the available work or hours of work among a specified group of affected employees in lieu of a layoff, and it allows employees to receive a portion of their unemployment benefits while working reduced hours.
Also helpful has been the fact that only about 30 or 40 percent of Lakeside’s manufacturing is for the automotive industry, although Lehenbauer said auto industry manufacturing is often an indicator of things to come.
“What you see in automotive, the others follow suit. We see hints of that happening,” he said. “People are afraid to spend money.”
Lehenbauer, Mike Madden, Carl Donath and Jeff Mudd started the business almost seven years ago. July is a historically slow month in manufacturing, so Lehenbauer said Lakeside cut back to three 10-hour days a week. The pay difference for employees was made up through the Shared Work program.
“We’re telling our guys to take advantage of time, because down the road when people start feeling comfortable about releasing dollars, we’re going to get pretty busy,” he said.
Spartan Light Metal Products has three plants, including one in Hannibal. More than 200 of the company’s 750 hourly and salaried employees were laid off last year, but some workers are starting to be called back.
Spartan Vice President of Human Resources Philip Zampogna said the company is “definitely weathering the storm.”
“In fact, we are profitable, but that’s because tough decisions were made, including keeping the Hannibal facility open,” Zampogna said. “We felt like we made a commitment to the community and a commitment to the employees there, and also we had a particular customer we are servicing there.”
About 60 percent of what Spartan manufactures is for the automotive industry. Zampogna said Spartan’s manufacturing of “difficult parts,” highly engineered and machined parts, adds value to customers. The company’s diversification across the automotive manufacturing base, with customers in the United States and Asia, also helps.
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He said since the companywide layoffs, staffing has remained steady.
“We are cautiously optimistic for the remainder of this year,” Zampogna said. “We look at a number of different automotive forecasting sources, and those indicate a slight uptake in orders for remainder of this year, and those forecast even better (activity) next year.
“But the words ‘cautiously optimistic’ are critical here.”
He emphasized customers will be looking at suppliers’ finances in the coming months.
“Financial viability and actually being profitable are going to be key for suppliers during this rebound,” he said. “Our customers are looking at us, making sure we’re financially viable and have solid business plans. That’s one of the reasons we made some changes in our work force, to make sure we remained profitable.”
— apierceall@whig.com/
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