ALLEGAN, Mich. -- Rockwell International Corp. has ended more than a year of speculation by announcing it will move its truck drive-line operations to an Iowa plant where workers have taken concessions and state and local officials are offering a host of incentives.
Workers were informed Wednesday that 223 employees would lose their jobs by next summer as manufacturing operations are consolidated in a 25-year-old plant in Fairfield, Iowa, which now employs about 220 workers.
Rockwell spokesman Mike Penington said in a prepared statement that the decision followed 'an exhaustive two-year evaluation of cost and competitive conditions.'
The layoffs will begin in August and will allow Rockwell to be a 'low-cost producer,' Penington said. In April, he said Rockwell management was reviewing all of its facilities for cost-effectiveness.
Penington said Rockwell will retain 30 workers and convert the plant to an assembly operation, with components put together there to be shipped to the Fairfield site.
'Well at least they're not padlocking the doors on us,' Allegan City Manager Michael Schepers said Thursday. 'We'll have to cope with this as it becomes apparent what the full effects are.'
Rockwell has operated its Allegan plant since 1953 and was until the late 1970s the 4,500-population city's top employer. The plant's workforce numbered nearly 1,000 at its peak, manufacturing drive-line components for heavy trucks.
United Auto Workers Local 709 has been deadlocked with the company for eight months on wage and benefit concessions. Union workers first rejected concessions when presented last year but approved more than a $5-per-hour cut in wages and fringe benefits on a second vote.
The agreement was later overturned by the National Council of Rockwell-UAW Locals, which indicated it did not want to change the master contract for all Rockwell-UAW plants.
Allegan workers now earn about $22 an hour in wage and fringe benefits, nearly $7 over the rate paid in Fairfield, a spokesman for Local 709 said.
The Iowa Transportation Commission has agreed to participate in a $1.3 million project with the county and city to build new roads to the Fairfield plant, in addition to $300,000 already committed by the city to road improvements, said city administrative coordinator John Brown.
He said the improvements are contingent on Rockwell keeping its plant open and that Fairfield also will cover costs of the company's move from Allegan and tax abatement on any needed plant improvements.
