JOHNSON CITY — The region’s manufacturing sector absorbed another blow Wednesday when German manufacturing giant Robert Bosch announced it may close a brake component plant on Twin Oaks Drive in Johnson City that employs about 140 workers.
A company news release cited “the sharp decline in production volumes, highly competitive markets and unsatisfactory earnings situation of the automotive brake business” for the decision. It added that Bosch management, which told workers Wednesday, would meet with union representatives to “discuss the potential closure as soon as a meeting can be scheduled.”
The company did not provide a timeline for closing. Bosch’s Becky MacDonald said management wants to meet with United Auto Workers representatives at the plant as soon as possible to see if they can produce any options for improving cost competitiveness at a plant that’s been running at just 50 percent of capacity.
“It’s a very tough situation and we’re fully aware of that,” MacDonald said from the company’s U.S. headquarters in Farmington Hills, Mich. “That’s why we want to be able to talk with union representatives as quickly as we can on this.”
A local economic development official said this morning that the news was a bit of a surprise despite the spate of area layoffs that have accompanied the recession.
“This came sort of out of the blue,” local Economic Development Board Director P.C. Snapp said Thursday morning. “On one of our visits about two months ago we went there, and production was great. They had the manager there and he was pretty confident.”
In fact, Bosch, which makes brake drums, rotors and hubs at its local plant, had recently elected to transfer a product here, Snapp said.
MacDonald confirmed that Bosch recently added a product that had been made in Brazil and began making it on an existing production line at the local plant.
She added, however, that production here had been in a slow decline that accelerated during the past eight months or so as the global recession took hold.
Bosch makes brake components at numerous facilities in the U.S. and Mexico, MacDonald said. Slumping demand across the board has led to some layoffs of both hourly and salaried employees in 2009, but she said the Johnson City facility is the first that has been considered for closure in Bosch’s auto parts s e c t o r.
She gave two reasons for the decision: cost competitiveness and the layout of Johnson City’s facility.
“In this situation, the Johnson City facility specifically is not cost competitive for us, and manufacturing brakes is an extra, extra competitive business, so the overall economic situation has had a disproportionately large impact on our brakes business and on the Johnson City facility,” MacDonald said.
German manufacturing giant Robert Bosch announced Wednesday it may close a brake component plant on Twin Oaks Drive in Johnson City that employs about 140 workers.