DETROIT - The Sault Ste. Marie, Mich.-based tribe of Chippewa Indians said it has purchased a controlling interest in Special Plastic Products Inc., an injection molding business in Fair Haven, Mich. The Chippewas said they also are negotiating with Chief Executive Officer Ernest Young, a tribe member who founded the plastics business, for a larger ownership stake. Management of Special Plastic Products has been turned over to general manager Dwayne Frechette, who joined the company in February.
A major expansion of the business now is scheduled for completion by late summer, about a year late. Special Plastic Products is preparing to move its manufacturing operation from Fair Haven into a new, 57,000-square-foot building in Pontiac. Both cities are near Detroit.
Last year, the tribe said it had invested $4 million in Special Plastic Products to become equal partners with Young. That stake since has been boosted to $5 million and is likely to increase, according to Chippewa spokesman John Hatch.
The tribe sought control of the company when it became apparent that Special Plastic Products was not achieving the manufacturing standards necessary to compete as a supplier in the automotive industry, Hatch said.
``What we want first and foremost is to meet industry standards and then to exceed them and take on more work,'' Hatch said.
Young could not be reached for comment.
The Chippewas, based in Michigan's Upper Peninsula, operate five casinos and 21 other businesses. The purchase of Young's injection molding business is part of the Chippewas' strategy of diversifying out of the gaming industry and providing employment for tribe members.
Frechette said he is ``very optimistic'' about the outlook for Special Plastic Products. Since joining the company, he has supervised a management reorganization and improvements within the manufacturing and engineering departments.
Of the 17 injection presses it now operates in Fair Haven, the company will move 15 into Pontiac and add nine more used machines. Frechette said the machines, with clamping forces of 500-2,000 tons, are being upgraded in advance of the move.
The company also is hopeful of landing a supply contract with an automotive customer, which would allow it to add another 40,000 square feet of space at the new Pontiac building, and add two new 500-ton and four new 3,000-ton presses, Frechette said. He is negotiating with three machinery vendors for the new equipment.
Special Plastic Products employs about 90 people in Fair Haven. It expects to move into the Pontiac plant in late August and begin production by October, when employment should increase to about 120 people. The company plans to retain ownership of the Fair Haven plant.