March 22 • 08:51 AM

Keihin: 'Layoffs not an option'

Capac plant holds fast on plans to open new assembly line this month

March 11, 2009
CAPAC — Barely a year into production, Keihin Michigan Manufacturing is optimistic that they can ride out the turbulent waters of the auto industry.

With evidence last fall that sales were already starting to slide, Keihin Vice President Dave Thomas said the Honda parts manufacturer on Koehn Rd. made some provisions.

In lieu of layoffs, management at Keihin have instituted reduced work schedules and a hiring freeze.

Instead of hiring additional associates, Keihin's current employees have put in overtime hours some weeks and a reduced work schedule was also implemented for some shifts. Layoffs are just not considered an option, Thomas said.

"We've put effort into hiring good people...we're not going to reduce our workforce," he said.

Elsewhere in the Keihin Corporation, personnel cuts have been made. In Indiana, severance packages are being offered, Thomas said. The hardest hit are those that make parts for Honda's V-6 vehicles. The Japanese automaker's sales are down 30 percent from a year ago.

Thomas acknowledges the Capac plant has had and will likely continue to have an advantage since it produces intake manifolds and HVAC systems for Honda's four cylinder models. Last year's record high gas prices drove sales of the economy brands and it's expected that they'll again be popular once the economy sees a turnaround.

"We anticipate sales getting better this fall, and we believe it's the four cylinder that will take off first," Thomas said.

The company is bolstered by the fact that two new assembly lines are slated to open at the plant—one later this month and the second in July.

"We should have everyone on a regular schedule by then," Thomas said.

Although they are not currently hiring, Keihin has a bank of potential employees that have already completed some of the necessary application process.

"If things take off in the fall, we'll be in a good position to take in additional associates," Thomas said.

In paperwork submitted to the State of Michigan per the Community Development Block Grant, Keihin reports they've hired 243 associates with 182 currently on staff. Currently, 81 percent of those associates met the low and moderate income grant eligible guidelines.

In return for the infrastructure money from the Michigan Economic Development Corporation, Keihin officials pledged to create at least 82 jobs and that 51 percent of those jobs be offered to low and moderate income persons.

Starting wage is $9.50 plus shift premium and benefits including life, medical and dental insurance, a 401k program and two weeks paid vacation after one year of employment in addition to a one week paid Christmas shutdown and ten paid holidays.

Keihin and the village of Capac recently submitted these figures, among others, to close out the state grant.

The state gave more than $900,000, the village invested $142,000 and Keihin pledged $22 million of their own dollars.

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