GR Spring Stamping Grows Despite Downturn

August 22, 2008
| By Pete Daly |
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WALKER — In the troubled world of the U.S. automobile industry, Grand Rapids Spring & Stamping seems to be going against the grain.

Denso, a Japanese firm that makes parts for the worldwide auto industry, has honored GRS&S and its employees with Denso's top award for its suppliers. GRS&S is growing despite the fact that some auto suppliers in Michigan are going under.

At a ceremony last week at the new GRS&S plant in the former Lear factory on Alpine Avenue, now known as Avastar Park, a representative of Denso told GRS&S employees that receiving the Regional Co-operation Award was due to the high quality of their work and on-time production. GRS&S supplies a large Denso plant in Battle Creek. GRS&S has 100 employees at the Alpine Avenue plant and has invested about $4 million into it since moving in last year.

Denso is the second largest automotive supplier in the world, operating in 30 countries, with sales of over $30 billion dollars, according to GRS&S.

Earlier this summer, GRS&S executives Jim Zawacki and Merle Emery were invited to Japan at Denso's expense to receive the award from Denso's president in front of about 1,000 people representing 500 companies from around the world. Denso then had its representative from the Battle Creek Denso plant meet last week with all the employees at the GRS&S Avastar Park plant to congratulate them personally on receiving the award.

GRS&S, which has its headquarters at its stamping plant at 706 Bond Ave. NW just north of downtown Grand Rapids, was founded in 1960 as Grand Rapids Spring & Wire. In 1985 it was purchased by H-Z Industries, and in 1995 the name changed to Grand Rapids Spring & Stamping. In 2003, the company entered into a production alliance with a stamping plant in Mexico, and in 2004, GRS&S opened a plant in Richmond, Ky., which has 100 employees. In 2007, GRS&S opened another plant in Chihuahua, Mexico, with 25 employees. GRS&S also has a tool and die shop in Comstock Park that employs 25.

Next month GRS&S will formally announce its new joint venture with the largest spring manufacturing company in India — Stumpp, Schuele & Somappa Spring & Wire, which has 11 plants there that mainly supply the worldwide auto industry.

In all, GRS&S has a total of 390 employees and had $72.5 million in sales in the fiscal year that ended in June. Zawacki, chairman of GRS&S, said production sales were up 15 percent in the last fiscal year, although its income from its tooling business was down.

About 95 percent of GRS&S sales are in automotive, 3 percent in office furniture and 2 percent in appliances, which includes computers.

Since 2000, GRS&S has received numerous awards from many companies it supplies, including Toyota, Denso and Benteler.

Zawacki said about 50 percent of production goes into Japanese automobiles, including Toyota and Nissan, and 20 percent goes into European autos, including BMW. The remainder goes to American auto companies.

Zawacki noted that the drop in auto production in the U.S. means hard times for many companies involved in the auto industry.

"We're taking over business from companies that have gone bankrupt," said Zawacki, adding that he has heard reports that up to 30 percent of auto industry suppliers may find themselves in financial trouble in the near future.

According to Erich Merkle, an auto industry analyst with Crowe Chizek in Grand Rapids, the automotive sector of the U.S. economy "remained remarkably healthy, all things considered, through most of 2007. Recently however, we have begun to witness a spill-over of the problems in the housing sector into U.S. light vehicle sales."

In July, said Merkle, vehicle sales in the U.S. reflected "a very disappointing" annualized rate of 12.6 million vehicles, which would equal a drop in sales of almost 9 percent compared to last year.

Based on research data from the U.S. Bureau of Economic Analysis, Merkle said, "We project that U.S. light vehicle sales will fall to 13.9 million units this year and will improve only slightly for 2009 to 14.2 million. Longer-term sales will recover, but not fully until 2011, when they should return to long-term trend/pre-recessionary levels of 16.4 million units."

If the prediction for this year is true, that would place U.S. light vehicle sales at its lowest volume since 1993.

Last week Delphi Corp. announced it expected to shrink its electronics and safety division and eliminate thousands of Midwest jobs in the process, possibly including several hundred in southeast Michigan.

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