Delphi Electronics & Safety officials announced plans Friday to vacate three massive buildings in the company’s complex at U.S. 31 and Lincoln Road, citing the necessity of saving money in today’s market conditions.
No layoffs were immediately announced for the planned move, which will leave Plant 9, Plant 10 and Delphi’s Information Technology Center buildings empty.
The one product line still in production in Plant 9 will move to another of the assembly buildings nearby.
Delphi spokesman Milton Beach said Friday the company will speak with Realtors to determine what to do with the soon-to-be vacant buildings.
“This is a result of our current market conditions, and trying to be more efficient at this site, we’ve got to utilize our facilities efficiently,” Beach said.
Although still Kokomo’s second-largest employer, Delphi has been trimming its local work force by about 400 employees per year for the past 10 years.
In mid-2003, two years prior to filing for bankruptcy, Delphi employed 6,300 in Kokomo. Today, its work force is about 4,000, including 1,400 hourly workers and 2,600 salaried.
Company officials said consolidation will begin in August, and renovations and upgrades will be made to the facilities where employees will be relocated. The work may continue through the end of the year.
Delphi’s Kokomo facilities produce integrated circuits, engine controllers, safety electronics, sensors and power electronics for hybrid and conventional vehicles at the Kokomo manufacturing facilities. Hundreds of engineers are also employed at the headquarters for Delphi’s Electronics & Safety division.
“Kokomo operations are very important to Delphi Electronics & Safety,” said Timothy Richards, vice president of Delphi Electronics Group.
“We have a very strong technical capability here in Kokomo that serves our locations around the globe and Kokomo continues to be a very important part of our future plans. The consolidation efforts announced today are focused on making these engineering capabilities more competitive by reducing the costs associated with underused facilities.”
Employees currently working in the buildings to be closed will be relocated to Delphi facilities on the same complex farther east including Plants 6, 7 and 8, the Engineering Resource Center, FAB III and the Corporate Technology Center.
Delphi will also move employees from a leased training facility located on Lincoln Road to the east complex. The consolidation will result in the clearing of approximately 614,000 square feet of floor space, company officials said. About 950 employees will be affected.
Beach said “99 percent” of the employees in Plant 10 and the ITC building, which are connected, are salaried. Plant 9, which still maintained some manufacturing, has been the subject of closure rumors for years.
The consolidation news comes the same week as General Motors, Delphi’s largest customer, announced plans to further reduce truck production. GM has already taken a $7.5 billion charge related to Delphi, and North American auto manufacturers are predicting to sell about 14 million cars this year, about 2 million less than the previous year.
The three buildings Delphi is vacating have an assessed tax value of $11.6 million. The company has been in arrears on its local property taxes since just after its 2005 bankruptcy filing, and according to the Howard County Treasurer’s Office, still owes $8.4 million to local schools and units of government.
Scott Smith may be reached at (765) 454-8569 or via e-mail at scott.smith@kokomotribune.com
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