Union leaders fear Packard plant closing

By Don Shilling

Packard has too much production capability for its orders, a union leader says.

WARREN — Union officials are concerned that Delphi Packard Electric is about to close its Cortland plant.

Union leaders met Tuesday with Packard executives after hearing rumors that the plant could be closed, said Mike O’Donnell, shop chairman of Local 717 of the International Union of Electrical Workers. They were told no decision had been made.

O’Donnell said, however, that the threat is real.

“Their manufacturing capability far exceeds what their customer orders are, so they need to make an adjustment somewhere,” he said.

David Olsen, a Packard spokesman, said no changes have been approved for the Cortland plant, but the auto supplier is constantly evaluating its production needs. Packard sells its wiring harnesses and related components to automakers, which are selling fewer vehicles this year.

Packard has two plastic-molding plants — one in Cortland and the other in Vienna — and both are operating below capacity, O’Donnell said. Each has fewer than 100 employees, even though Vienna was designed for 180 and Cortland for 120.

O’Donnell said he expected that Cortland employees would be moved to Vienna if their plant is closed.

The union is claiming, however, that terms of its labor contract don’t allow Packard to close the plant. Production was to continue in both plastic-molding plants, a cable-making plant on North River Road, a metal-stamping plant on North River Road and a resin-compounding plant in Rootstown, O’Donnell said.

He added that Packard executives don’t agree with the union’s interpretation.

At one time, the plastic-molding plants were seen as part of a bright future for Packard. It had shipped labor-intensive final assembly work to Mexico but said it would build its local operations around high-tech machines that could produce components for those assemblies.

The Cortland plant, which had been closed for three years, was reopened in 2000 with 120 molding machines. Packard spent $42 million to renovate the plant and buy the machines.

Packard spent $58 million to build the Vienna plant and install 180 machines. It opened in 2003.

Packard’s parent company, Delphi Corp., filed for bankruptcy protection in 2005, however, and has since cut back its U.S. operations. Packard’s hourly work force has been reduced from 3,800 to 800.

The work force had numbered 950 before about 310 Packard workers agreed to transfer to the General Motors Lordstown complex. Packard has hired about 200 workers this summer to fill in for them and replace other workers who have left, O’Donnell said.

New hires are paid $10.82 an hour and don’t have medical benefits. The 25 percent of Packard’s production workers with the lowest seniority fall into this pay tier. As new hires are added, however, workers move up to the next tier, which pays $11.33 an hour and has medical benefits.

Longtime production workers have had their pay cut from $27 an hour to $16.50 but are receiving a $105,000 payment over three years.

shilling@vindy.com