A leading plastics supplier fired 17 of 42 salaried employees at a South Carolina facility for overshooting cost targets and otherwise mismanaging the plant. ``I went down there Feb. 9 and 10, and believe me, when I finished looking it over, I wasn't happy,'' said Ted Zampetis, president of Standard Products Co. of Cleveland.
The Spartanburg, S.C., plant makes rubber and plastic parts for the Big Three automakers and for Diamond-Star Motors Corp. The plant is scheduled to make trim pieces for Ford Motor Co.'s all-new 1996 Taurus/Sable due this summer.
A spokesman said cost-control, pricing and management issues were at the core of the problems at the Spartanburg plant.
``The management there didn't seem to realize how serious the problem was,'' Zampetis said. ``The only thing to do was basically to raise the red flag.''
Officially, the spokesman called the shake-up a ``restructuring of operations to increase efficiency and reduce operating costs.''
Zampetis assigned Doug Malm, vice president of plastics operations, to oversee the Spartanburg plant, the spokesman said. Malm has been with the company since 1990. The 17 fired employees have not been replaced.
Zampetis said the prior management made ``bad pricing decisions'' on three out of five programs.
Staffing was too high, he said. And there were problems with the way the plant's tooling was set up, and with the tooling itself, he said.
The problems will lower earnings by 8 cents per share this quarter, and another 6 cents next quarter, he said.
Standard Products has 16.7 million shares outstanding, so the problems will cost about $2.3 million over the two quarters.
That will push quarterly profit below year-ago levels, Zampetis said. In the second half of the 1994 fiscal year, Standard Products earned $1.32 per share, or about $22 million.
The firm makes extruded and molded rubber and plastic parts. Spartanburg is one of five plastics plants that Standard Products operates in the United States.
Overall, the company employs more than 6,600. The Spartanburg plant now has 200 blue collar and 25 salaried workers.
Jack Kirnan, automotive analyst for Salomon Brothers Inc., told investors in a March 16 newsletter to avoid the stock.
The company had 1994 sales of $872 million and is shooting for $1 billion for its fiscal year ending June 30.
Standard Products supplies a range of vehicles, including the Ford Mustang and Windstar, Chrysler Corp.'s Neon and 1996 minivan and Chevrolet Lumina.
According to Kirnan, the firm has an average of $35 in content on North American vehicles.
About 40 percent of its businesses is with Ford, 37 percent with General Motors, 20 percent with Chrysler Corp. and 3 percent with Japanese makes, Kirnan said. The European affiliates of those customers make up about 21 percent of the firm's business.
About 80 percent of the auto-motive business is for passenger cars, the rest light trucks.
The company said new business should push annual sales to about $1.3 billion.