A change in corporate leadership typically means changes within the company. Newcor Inc. will be no different.
Incoming President and Chief Executive Officer Keith Hale, named to the post Nov. 5 to replace W. John Weinhardt, has several changes in the works. Among them:
Closing a plastics and rubber plant in January in Auburn Hills, Mich. The plant, which generates sales of about $7 million, employs 40.
Expanding Newcor's sales operations in Europe. Hale recently met with a sales group in Europe in hopes of establishing a presence in countries such as Germany, England and Italy.
Naming Lee Johnson, formerly a quality assurance manager at Newcor's Deco Group division, a general manager of Machine Tool & Gear.
These changes and others are necessary, Hale said, because the Bloomfield Hills, Mich.-based parts maker has disappointed investors all year long.
``First of all, we need to gain credibility,'' he said in an interview. ``Our stock has not performed well for investors. We have not delivered to our bottom line the last several months, and we have no choice but to turn that around.''
Closing the Auburn Hills plant was a decision he made quickly. Hale said he has met with the plant's main customer, Ford Motor Co., to explain that Ford's rubber and plastics parts now will be manufactured at Newcor plants in Walkerton, Ind., and Deckerville, Mich.
The 10,500-square-foot plant will close at the end of January. Soon after, Hale will move about 15 people from Newcor's corporate headquarters to the Auburn Hills site. Most workers moved will be sales and marketing staff, he said.
Hale said he plans other ways to ``consolidate'' and cut costs.
``We might drop from the 1,750 employees we have, but probably from attrition, which doesn't affect morale,'' he said.
Hale comes to Newcor after 13 years as general manager at Deco International Inc., a Royal Oak, Mich., precision-machine components maker acquired by Newcor in March.
Weinhardt had been Newcor's CEO since March 1995 and transformed it from a specialty-machine company to a maker of automotive and truck components and assemblies. Its customers include Detroit Diesel Corp. and American Axle & Manufacturing Inc.
He made Newcor a much larger company and thought the new specialty would prove much more predictable.
However, the company's financial picture for the 1998 fiscal year has been poor.
For the year, Newcor reported a loss of $1.15 million, compared with profit of $3.89 million for 1997. For the year, Newcor posted sales of $206.2 million, compared with $130.8 million a year ago.
Most of the losses were recorded during the past two quarters. Newcor lost $879,000 in its third and fourth quarters.