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Published: Thursday, 9/28/2006

Lott among area firms hurt by big 3 cuts

BY JULIE M. McKINNON
BLADE BUSINESS WRITER

Lott Industries employees with developmental disabilities have felt like part of the Ford Motor Co. family since 1981, through the work they have done for the automaker's Maumee Stamping Plant.

That relationship will end in 2008, when Ford shutters its suburban Toledo factory. Not only will 700 Ford jobs be eliminated, leaving employees to accept buyouts or transfer to other plants, but 300 disabled Lott workers who put clips on plastic wheel wells for the Ford F-series pickups and other vehicles will lose work, too.

Recently announced permanent and temporary shutdowns at Ford, General Motors Corp., and DaimlerChrysler AG are sending shock waves throughout northwest Ohio and southeast Michigan as auto suppliers assess how much damage their businesses are likely to sustain.

Toledo's nonprofit Lott, for example, will lose more than 70 percent of its revenues when Maumee Stamping closes, or roughly $4.5 million of the $6 million it expects to have this year.

Either other work will have to be found for a third of its disabled workforce - who have achieved various quality distinctions favored in the auto industry - or staff will have to come up with other activities, said Jeff Holland, business manager and chief executive for the company.

Lott is staffed by employees of the Lucas County Board of Mental Retardation

"The main thing we're concerned with is the labor," he said. "Not only is it the most plentiful work, but it's the most prestigious."

Dana Corp., Toledo's largest company with $10 billion in sales last year, also stands to be hard hit by Big Three cutbacks. Those car makers last year accounted for 43 percent of sales, including 26 percent from Ford alone.

A Dana spokesman said the company's production and sales will be affected, but he declined to elaborate.

Companies such as Dana and American Axle & Manufacturing are suffering because they depend heavily on the shrinking Big Three, one supplier analyst said. But Johnson Controls Inc. and suppliers that have more successfully expanded business with growing Asian automakers such as Toyota Motor Corp. are doing fine, said Marc Santucci, of ELM International Inc.

"They're still building as many cars in the United States as we have been for a while, it's just that it has shifted," he said. "If you're doing business with Toyota, you're having the greatest time ever."

Lott, Dana, and other local suppliers have been trying to diversify beyond the Big Three. At one time, Ford accounted for about 80 percent of revenues at Lott, where disabled workers are paid by the piece for the parts work and some make significantly more than minimum wage, Mr. Holland said.

Conversion Technologies International in West Unity, Ohio, has been seeking customers outside the auto industry in the last few years. It has 32 employees. Less than 20 percent of its business is with the Big Three, such as applying adhesives to auto parts, and planned cuts shouldn't affect more than 10 percent of that chunk, said Chet Cromwell, president.

Hinkle Manufacturing Inc., of Perrysburg Township, which primarily supplies reusable containers needed for new vehicle launches, has about 70 percent of its business tied to the Big Three, said Tab Hinkle, president and general manager.

Although Ford, GM, and Chrysler all are planning many new vehicles, that could change if sales continue to suffer, in turn hurting the 100 workers at Hinkle, he said.

"Who knows where it's going to go at this point?" Mr. Hinkle said of the auto industry. "It's not very positive."

Contact Julie M. McKinnon at:

jmckinnon@theblade.com

or 419-724-6087.



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