By Jack Gurner
WATER VALLEY – It’s been six months since BorgWarner Plant Manager Hans Werner first predicted that things might get ugly at the local plant.
“I think we are through the ugly,” Werner said Friday following a round of layoffs that he believes are the last significant cuts for this year.
The latest reduction, which will affect 50-plus hourly and salaried employees, will be completed by the end of this month.
There will be 228 employees at the plant as of June 1, according to the plant manager who has seen the workforce cut in half since his arrival last fall. “That is the most ugly thing for me.”
Continuing problems in the auto industry have caused the local plant to significantly reduce sales forecasts. “We were prepared for a period of idle production for May,” Werner said.
However, recent announcements involving Chrysler, a major customer, have further complicated the situation. “We will be losing a ton of money in revenue – and along with that profit – for the months of May and June. And, of course, we need to make that up for the rest of the year.”
Werner predicted that the industry would make a comeback. “I expect Chrysler coming back with a considerable volume of cars still being built, he said. “Because I just can not imagine that Fiat and Chrysler and the government would make this big of a mess of the whole story without Chrysler coming back.”
Werner added that he also sees significant increases in number of parts Ford is expecting the local plant to deliver.
“Although we have those deep cuts, this business still will make money. In other words, we are in the profit range,” he said, commenting on the financial condition of the local plant. “We’ve had a very, very good first quarter. Now, even with these significant reductions in sales at Chrysler, we’re still better than break even due to the things we are doing here.”
“By the way, I think this plant is ready for the future based on the things we have done for the last seven or eight months,” Werner continued. “If we hadn’t done these things this plant would be done…gone…lost. Not just in deep trouble, this plant would be gone.”
Timothy Manganello, Chairman and CEO of BorgWarner, visited the Water Valley plant in April, according to Werner. “He left this plant with a very good feeling. He said he would put any business in this plant based on what he had seen. A better statement about the condition you have in your plant cannot be made.”
New Plant Manager
Because of problems in Europe, Werner will be leaving Water Valley several months earlier than planned. Kent Tobin, who served as acting plant manager at BorgWarner’s Muncie, Ind., facility, will replace him.
“I will be leaving this plant by the end of the month. This was not in the plan,” Werner said. “The reason for it is that we have had a problem in Germany with two plants there which needs to be fixed.”
He believes the American auto industry has hit bottom and is ready to pick up again. “I don’t see that in the German market right now because they had a delay of this stuff by a quarter or two.”
Werner said that he is sad and upset to leave Water Valley. “Up to now it was all shrinking and cutting and optimizing…the dirty job…the ugly. We’re through the ugly. Now it would have been fun to build it up.”
“I really like these people here and this probably hurts most,” he added. “I know Kent Tobin is the right guy to keep things moving here.”