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BorgWarner In The Middle Of The ‘Ugly’ With Latest Cuts

Cutline: Joe Potts, a BorgWarner employee for more than 31 years, believes the local plant will survive the current economic crisis. – Photo by Jack Gurner

By Jack Gurner

WATER VALLEY – Last November BorgWarner Plant Manager Hans Werner predicted that things might get ugly at the local plant.

“We are in the middle of the ugly,” Werner said Friday after another 30-plus employees were laid off with more to follow before the end of the month. “We are cutting out what is absolutely not necessary to run this business.”

“It is not that we know the exact number yet, but it will be significant. I am not talking about hundreds. But it will be a two-digit number,” he added.

The job losses at the local plant come amid global vehicle production cuts that pushed BorgWarner Inc.’s full-year earnings into the red. Company officials announced last Thursday a net loss of $35.6 million on revenue of $5.3 billion.

Worldwide the company cut 4,400 jobs including 2,400 positions in North America. Executive officers and board members salaries were cut by 10 percent as well.

Werner said that the local plant had sales of $190 million back in 2005. “This dropped down to $120 last year.”

He said that based on fourth quarter and first quarter performance, sales would be below $90 million for the year.

“That’s significant,” he emphasized.

But, even with the drop in sales, the Water Valley plant is at the top of transmission control systems group with plants in China, Europe, as well as here in America. “We are actually the plant which performs best out of this group of plants,” Werner said.

Tough Times, Fast Response

Last week the company held a meeting for all employees with the theme “tough times; fast response.” According to Werner, the purpose was to keep everyone at the plant informed.

Werner and his management team are trying to overcome the rumor mill that has been in operation for years, but has been spinning faster and faster recently. “You have some guys pouring poison into the community,” he said.

There are only a handful, he believes, but they are trying to poison the mood in the plant as well as among the citizens of the community. To overcome this, he is holding employee meetings at least once a month and making information available through the newspaper.

“The more you inform people the more you will have transparency, the more you will have their trust,” Warner said.

The plant manager acknowledged that the layoffs take a human toll but are necessary for the plant to survive. “We are sweeping the staircase from the top down. This means even the management staff is reduced.”

“We saw a lot of weeping and faces in tears the past couple of days,” Werner said. “Just this morning one of those shift leaders left the building and he was absolutely in tears. That the part you don’t like of your job. But, for the sake of the rest you need to do it.”


Management Change Allows Workers To Contribute To Plant’s Survival

By Jack Gurner

WATER VALLEY – The layoffs at the local BorgWarner plant last week and those yet to come are just one component of a plan to bring the company through the current worldwide economic crisis.

But, you cannot shrink a business to success without doing anything else, said Plant Manager Hans Werner.

Another component of the plan is to fundamentally change the management process by eliminating one leadership level above the workers on the shop floor. This brings responsibility for decisions down to where the work is done.

“What we saw is there is a workforce who has been working here for partly more than 35 years,” Werner said. “Probably those guys know a lot about running this business. In other words, we empower the workforce in this plant to manage the shop floor instead of having somebody directing them day by day by day.”

“I think that is a pretty important move for two reasons,” he continued. “Number one, it helps us to save costs and also it helps everybody to get involved, which is very, very important. Because everyone now has a chance to contribute to the survival of this plant.”

This is not the first plant to move in that direction, according to Rodney Francis, Human Resources/ Environmental Health and Safety Manager. “There are a lot of plants that are doing it.”

Francis explained that the self-directed work teams will have leaders selected by interviews. But, the nominees for those interviews will be selected by a vote from the workers on the shop floor.

“The process we are using right now is really aimed at getting the people involved as much as possible,” he added. “So, that’s why they have a voice in who is going to be doing the leading.”

One of the people right in the middle of the changes is Joe Potts who has been working at the plant for over 31 years. He is one of several product line whose jobs will be combined with the product leaders’ jobs to create one group called production coordinators.

That will eliminate four management positions, according to Potts.

Potts said he doesn’t know if he will make the cut. “This may be the point where Joe has to step out and someone else step in.” he said. “But, if that is the case, I have confidence that they can step up and do the job.”

“From what I have seen we have good people who can step up into the leadership positions,” he added. “I believe it will be a success.”

Potts said he believes that BorgWarner will continue to be a part of Water Valley for some time to come. “This plant is still performing well. I attribute that to all the hard work that has gone on here.”

“Right not we’re running at the top of our division,” he added. “I’ve never seen BorgWarner close a plant that is making money. For them to close this plant with it still making money would be a first.”

Potts said the automotive industry has always had its ups and downs and BorgWarner has been able to see downturns coming. “They react a little bit ahead of the game. They’ve been successful doing that and keeping the profit margin up.”

He added there will more than likely be changes in the auto industry. He predicted that the cars of tomorrow could be very different.  “They may go to an electric car, but they are still going to have to have the controls that we provide. Hopefully that will keep us in the market.”

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