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3/22/2005 5:41:00 PM
Wabash officials working to try and keep GDX Automotive facility operating
This is an aerial view of GDX Automotive's sprawling complex in Wabash. It was taken prior to demolition of GenCorp Automotive's headquarters (located between the two parking lots).
This is an aerial view of GDX Automotive's sprawling complex in Wabash. It was taken prior to demolition of GenCorp Automotive's headquarters (located between the two parking lots).

Wabash Plain Dealer

By ROY CHURCH, Wabash Plain Dealer

Officials at GDX Automotive here are leaving no stone unturned in an attempt to keep the plant open.

Reeling from the slump in the automotive industry, the Wabash plant finds itself in an unusual situation - losing money. Corporate officials have told local officials to get their budget to a "break even" point.

"We have to cut our costs to weather this storm," Plant Manager Randy Shepherd told The Plain Dealer. "We are aggressively quoting new jobs, including take-away business from our competitors, but we currently only have one new job for mid-2006.

"We have new contracts for 2007 that will allow us to start growing employment," he added, "but we have to get there.

"We have to do everything we possibly can to get to break even. We have been encouraged to think outside the box."

To help them do that, Shepherd and Lance Connoy, the company's human resources manager, turned to Wabash attorney Joel K. Stein.

After taking a tour of the Wabash facility back in October, Stein made the following suggestions:

  • Talk to city officials to see if they could help in any way - reduce utility costs, provide CEDIT money, give tax abatements.

  • Have the facility reassessed by the Noble Township assessor in an effort to reduce the amount of taxes paid.

  • Contact state officials to see what help might be available there.

  • Seek the assistance of the union members.

    While the city couldn't do much in the way of utility rate adjustments - sewage being the only utility it controls - officials did work with GDX in other areas.

    Tax abatement

    On Monday night, GDX will present requests for four tax abatements - two for equipment installed in 2004 and two for equipment to be installed this year - to the City Council. The four requests total $2.7 million in expenditures at the plant.

    State law requires a public hearing for the two requests that are retroactive to 2004. That hearing will be at 6 p.m. in council chambers at City Hall.

    GDX officials and Stein met with the city's Incentive Review Authority Thursday and Stein told The Plain Dealer he expected a favorable recommendation from the board.

    Council President Scott Long told The Plain Dealer Monday the review board would give a favorable recommendation to the council and would recommend spreading the abatements over the maximum period - 10 years.

    CEDIT funds

    In addition, Mayor Bob Vanlandingham has offered to give GDX $74,100 in CEDIT money over the next two years

    "We have been in ongoing discussions (with GDX) for several months. Wabash wants to keep GDX," Vanlandingham told The Plain Dealer. "Wabash needs to keep GDX.

    "I originally offered them $20,000 for this year. Then I talked to Brownie (City Clerk/Treasurer Meredith Brown) and we decided we could give them a little more."

    As it stands now, GDX would get a check for $37,100 this year and the rest in 2006, the mayor said.

    "We need to be willing to help as much as we can," he added.

    The city and GDX will enter into a contract requiring periodic updates on how the money was used, and in the event the company has to close its doors here, the money would be repaid with interest.

    Property taxes

    In addition to the tax abatement from the city, GDX will get a property tax break from the Noble Township assessor's office.

    Brenda Conner, Noble Township assessor, told The Plain Dealer that GDX had filed a petition to be reassessed.

    "I went out with a representative of the firm that handled our reassessment and toured the entire GDX plant to re-evaluate the usage. Much of the space that had been assessed as 'light manufacturing' was now being solely used for 'warehouse/storage'," she said.

    Mrs. Conner explained that "light manufacturing" is assessed at $31.76 per square foot compared to $23.11 for "warehouse/storage/small shop."

    "We try to work with people as much as we can," Mrs. Conner said. "They have legitimate concerns here and we needed to address them."

    Mrs. Conner said corrections of this nature are becoming more common because of changes in the law.

    Help from state

    Stein also talked with Chris Pfaff, director of business development with the Indiana Economic Development Corporation.

    While Pfaff said he couldn't discuss the particulars, he did tell The Plain Dealer his office would "be as proactive and supportive of this project as we can be.

    "We are working with GDX officials on the package."

    Union meetings set

    As for the union, members of the United Steel Workers of America Local 626 are meeting with company officials today and Thursday. The Plain Dealer learned those talks were scheduled after GDX employees met with new president for North America last week and the CEO of GDX Automotive met with employees in December.

    The North American president also met with the senior leadership teams for the plant and the union while in town.

    "The union is concerned," Shepherd said, "and we will be exploring avenues with them."

    Community support

    Connoy and Shepherd also noted that local vendors have been supportive. One service company has frozen its wages for work done at the plant.

    "We spend a ton of money locally, and our local vendors have been very cooperative," Shepherd said.

    "The automotive industry is struggling," Connoy said. "There was an article in USA Today last week that said GM (General Motors) was at an all-time low.

    "The industry is losing market share and, as a result, our volume is deteriorating.

    "We currently have 100 percent of the glass seals for the Ford Explorer market," Connoy said, "but the St. Louis assembly plant just went from two shifts to one. We have a great rating with the Ford Motor Co., but if their production is down, our production is down."

    One "outside-the-box" innovation that has come out of all this is that GDX for the first time in its history has contracted to sell mixed rubber outside the automotive industry.

    The local plant recently delivered its first shipment of mixed rubber to an extrusion facility (in Ohio) which is involved in the construction industry (windows) and the recreational vehicle industry.

    "It is important that we grow the Ohio business to help offset the downturn in automotive," Shepherd said. "So far it looks promising."

    Copyright © 2005 Wabash Plain Dealer

  • Related Links:
    • GDX Automotive web site
    • Cerberus: Sale’s of Wabash plant is official, but not final

    Copyright © 2014 Wabash Plain Dealer

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