Contech lays off 130 workers in Auburn

February 26th, 2013

News Coverage:

Contech lays off 130 workers in Auburn

Posted: Tuesday, February 26, 2013 12:00 am | Updated: 8:03 am, Tue Feb 26, 2013.

By Dave Kurtz

AUBURN — Contech Castings LLC in Auburn laid off 130 employees Friday, a company official confirmed Monday.

The layoff idled about half of the work force at the automotive parts plant on Auburn’s west side, said Bob Lacourciere, vice president of sales and communications for Contech. The lost jobs paid in the range of $10 to $15 per hour, he added.

“Unfortunately we were notified at a very late moment last week that we had lost a contract with an automotive customer, and we had very little time to react,” Lacourciere said. He said the layoffs were made quickly “to ensure that the balance of the facility continues to operate,”

The plant makes and machines die-cast aluminum parts, including steering components. Lacourciere said it still has a significant amount of business.

“We have other work that we’re trying to bring into the facility,” Lacourciere said. “The people who have been laid off would certainly have the opportunity to come back as circumstances change,” through new business or staff turnover, he added.

Joe Frank of the Indiana Department of Workforce Development said the department’s rapid response team has visited the plant.

Contech did not file a Worker Adjustment and Retraining Notification of the layoffs. However, Frank said a WARN filing is not required in the case of unexpected events such as losing a contract.

“They did what a WARN notice is supposed to do,” Frank said, by contacting the state and bringing in the rapid response team.

Frank said laid-off workers should “go to the local WorkOne as soon as possible, and we can help you with a lot of free services that will help you find a job as quickly as possible.” The local WorkOne office is at 936 W. Fifteenth St., Auburn. Most of its services are free, Frank said.

Laid-off employees also may go online to to learn more about the Department of Workforce Development’s services.

Contech Casting’s parent company, Revstone LLC, reportedly filed for bankruptcy on Dec. 3, 2012, in a Delaware court.

Lacourciere said Contech Castings is not bankrupt, however. Contech Castings owns five plants, including one in Pierceton, and has headquarters in Southfield, Mich.

Revstone bought Contech Castings from its previous owner in a bankruptcy sale in June 2009. The Auburn plant on Power Drive, just east of Interstate 69, opened in 1985 with Sealed Power as its owner. The division became known as Contech in 1988.

Marathon Automotive Group LLC bought Contech in 2007 for a reported $146 million, from SPX Corp., previously known as Sealed Power.

Crain’s Detroit Business reported on Feb.13 that Revstone obtained $37.5 million in financing from Icon Investments.

In a news release, Revstone CEO Kevin Cramton said, “This financing package stabilizes our businesses and gives us the resources to launch new programs in aluminum die casting, fine blanking and engine damper technology.”

However, the Crain’s report said Revstone owed $31 million of the financing package to another lender.

Crain’s said Revstone has been “underwater on several of its contracts” and tried unsuccessfully to sell some of its more profitable divisions earlier this year to float the rest of the business.

Crain’s described Revstone as “a collection of discarded auto supplier divisions put together by industrialist George Hofmeister.” It said Revstone owns a total of 29 factories.

Categories LayoffsClosures