Intermet On The Brink Of Shutdown

Another 500-plus manufacturing jobs could be on the chopping block in Sturtevant, Wis.

Last Wednesday, Intermet's union announced it had rejected the company's call for deep cuts in wages and benefits. At least initially, Intermet wanted to cut its union wage and benefit costs from $30 million to $13 million, said Jeff Fitzgerald, president of United Auto Workers Local 627.

"Unfortunately (the company's) proposal was so severe that many of our more than 500 employees would be better off on unemployment," he said.

Based on Intermet's previous statements, that is exactly where the workers could find themselves before long. The Troy, Mich.-based auto parts maker is in a bankruptcy reorganization. It has said it would scrutinize all of its factories and hinted it would close any that are poorly or underperforming.

During the recent talks, Intermet negotiators also threatened to start negotiating terms of plant closings if there is no agreement on concessions, Fitzgerald said.

Mike Kelly, spokesman for Intermet, said he could not comment on ongoing negotiations with the union.

The outcome should be known soon. Fitzgerald said Intermet must file a bankruptcy reorganization plan by Dec. 31, and that plan would lay out its plans for a profitable company.

More than 600 jobs are at risk. Besides 508 union workers at two Intermet factories here, the company employs more than 100 local nonunion people, Fitzgerald said.

He said Intermet's local operations, a die casting plant and a machining plant, have a sales base of about $80 million.

"They claim a 10 percent, or $8 million, loss," and want to turn that into a 10 percent profit, Fitzgerald said. "They expect us to come up with this money.

"We tried to address reasons we were losing money. We made numerous attempts."

Company representatives were "not at all" receptive, Fitzgerald said.

"That was probably the most disappointing thing. They're not willing to address operations with a 10 percent loss."

Fitzgerald claimed that some of the requested concessions would have dropped Intermet's lowest-wage workers to minimum wage or below.

Bottom-level workers earn $11.33 per hour, he said. The median is $14 to $15 per hour for computer numeric control operators. Veteran, top-wage toolroom employees earn $26 to $27 per hour.

To cut any of those by half would drop them far below realistic and going rates, Fitzgerald said. The company asked for equally deep cuts in benefits, he said.

"It became evident that no matter what we did, it would not be enough," Fitzgerald said.

The two sides have scheduled another meeting for Dec. 2.

Intermet, one of the world's largest metal casters, has 17 North American production factories. Seven of those, including the local plants, are union shops, and 10 are nonunion.

Intermet, founded in 1846 as Columbus Iron Works, has nearly 6,000 employees.

In announcing the filing of its Chapter 11 bankruptcy, Intermet blamed its problems on soaring prices for scrap steel and other raw materials. Those include such die-casting metals as aluminum and magnesium.  Journal Times Online (Wisconsin)