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Supplier Consolidation Claims Grand Haven Plant
GRAND HAVEN — Johnson Controls Inc.’s ongoing efforts to consolidate its supply base has prompted a Grand Haven company to close one of its production plants.
GHSP Inc. will begin phasing out operations at its plant at 1500 S. Beechtree St. in Grand Haven by the end of the month. The closing, due for completion by mid-August, will affect about 120 employees.
GHSP President Jerry Scott cited JCI’s decision to consolidate its local supply base and bring some of the work GHSP performed in-house at its Holland facilities. Accounting for 85 percent of the work at the plant, the JCI business was too much of a loss to overcome, Scott said.
The loss was compounded by the automotive industry’s present downturn, he said.
“We had numerous things in the mill, but when you lose that much, especially at this time, we just didn’t feel it was feasible to find this much work,” Scott said. “The downturn sort of made it the final decision.”
The plant being closed was once owned by the former Michigan Plastics Co., which GHSP acquired 16 months ago. The plant supplied JCI’s Holland operations with plastic components such as armrests and trim for overhead consoles.
The business loss, Scott stressed, was not related to quality or pricing issues with GHSP.
“It wasn’t because we didn’t perform. We did everything we could possibly do to save those jobs,” Scott said. “We were not big enough to be one of their strategic suppliers.”
JCI, one of the world’s largest Tier 1 automotive suppliers, has sought in recent years to consolidate its automotive supply base, a move that has left its smaller suppliers out of the loop. The move follows a general trend within the auto parts industry to streamline supply bases, which is what automakers have done to the Tier 1 suppliers for years.
“There’s been a trend to manage fewer suppliers who can do more for you. Sometimes it means our suppliers get more business, sometimes it means less,” JCI spokesman Bill Dawson said. “Work is moving around all the time.”
GHSP is primarily a designer and manufacturer of electro-mechanical systems for the automotive and office furniture industries. The company is a division of Grand Haven-based JSJ Corp. and has three other West Michigan facilities, including a second plant in Grand Haven and a facility in Spring Lake, which are largely unaffected by the closing. GHSP also has a plant in India and one in Europe. The company is still deciding what to do with those facilities.
Workers displaced by the closing will receive state and local assistance finding new work or retraining for other jobs, said Joy Gaasch of the Association of Commerce and Industry in Grand Haven. While disappointed to see a local manufacturer close part of its operations, the decision is understandable, Gaasch said.
The closing is a reflection of the current business climate, especially for automotive-related manufacturers, she said.
“Until we get a resurgence in the economy, these things are going to happen,” Gaasch said.