Autos Facing An Uncertain 2008

December 26, 2007
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GRAND RAPIDS — If Grand Rapids Spring and Stamping President Jim Zawacki Sr. knew how the credit crunch that resulted from the sub-prime mortgage mess will affect the economy next year, he would have a better idea of what 2008 has in store for the automotive industry and his business.

“We had a good 2007, and I would hope it would continue. But I’m afraid that all the news you hear is negative,” said Zawacki, who also owns the automotive parts-making company.

Zawacki is concerned about how an apparent reluctance on the part of lenders to make loans will affect the purchase of automobiles. His concern is magnified by the fact that General Motors, Ford and Chrysler have downgraded the number of vehicles they predict they will sell next year. Chrysler just reduced its first-quarter production schedule by 15 percent, and GM reported last week that it will begin buying out the contracts of 5,200 workers next month.

“We are forecasting that we will have more sales in 2008, but the proof will be in the first quarter,” he said.

Last August, GRS&S moved a portion of its work force into the former Lear plant at 2150 Alpine Ave. NW in Walker. The firm shifted about 120 of its employees across five departments from the Bond Avenue plant in the Monroe North Business District to the Walker site, where GRS&S is leasing roughly 120,000 square feet from Alpine Endeavors LLC. The site is in a nearly tax-free Renaissance Zone.

GRS&S said the move would let the company expand its stamping capacity at the Bond Avenue plant. But because many of the firm’s customers have left the state and because the most recent job forecast from the University of Michigan shows more statewide job losses are coming for the next two years, Zawacki said his company hasn’t gone ahead with the expansion.

“We have no plans to do that in the immediate future,” he said.

But GRS&S has extended its reach. Zawacki said the firm bought a plant in Chihuahua, Mexico, in November, and did so because GRS&S does a lot of business in that country.

“The shame is, if we went back five or six years ago, 80 percent of our business was in Michigan, but today it’s 20 percent. And five years from now, at the rate we’re going, I don’t know what we will have in Michigan. Our customers are just leaving, and we have to be where our customers are,” he said.

The city of Chihuahua is the capital of the state of Chihuahua and is located just south of the Texas border. Light industrial is a mainstay in the city’s economy. GRS&S does stamping and assembly at the Chihuahua plant. The firm also has a stamping and assembly plant in Richmond, Ky.

GRS&S was founded in 1960 as Grand Rapids Spring and Wire and has been an industry leader throughout much of its history. The company won the Nissan Quality Award this year and has received the Toyota Achievement Award for three consecutive years.

In addition to stamping and assembly, GRS&S produces torsion, compression, extension, ground-end and closed-end springs and has slide framing capabilities.

Zawacki said things began slowly this year and then picked up as 2007 unfolded. GRS&S found some new business and also received more orders from Nissan and Toyota

“It started out slow and ended up good — very good,” he said. “We picked up new business and we do business directly with Nissan and Toyota, and they’ve been good customers.”

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