Titan Plastics Group is closing a Brea, Calif., injection molding plant and, separately, adding 14 presses in Clyde, Ohio, for two Whirlpool Corp. programs.
``California has a difficult manufacturing environment, and it was a consideration about whether it would be viable going forward,'' said Greg Botner, Titan president and chief executive officer. He cited the costs of workers' compensation, litigation and employee benefits.
Botner informed Brea employees Nov. 30. ``Most will be displaced,'' Botner said in a telephone interview. ``We will work with California state authorities'' in assisting the site's 90 employees.
Some manufacturing will move to other Titan facilities. The Brea plant's remaining work involves parts and components for Honeywell International Inc.'s Bendix brake systems, Invensys plc's Robertshaw Industrial Products Division and Spectrum Brands Inc.'s Marineland and Aquarium Systems.
The Brea plant has 34 presses of 50-400 tons. ``Those assets will be distributed'' to other Titan locations, Botner said.
The Brea action, effective Jan. 30, represents ``a further consolidation of our facilities,'' he said.
Titan closed a Monterrey, Mexico, plant in April 2005 and an El Paso, Texas, facility in April 2004.
Meanwhile, the Clyde facility is expanding its molding capacity ``to accommodate award of several new products'' with the Whirlpool programs, Botner said. Titan does some Whirlpool molding in a Brampton, Ontario, plant.
Titan and Benton Harbor, Mich.-based Whirlpool began development work 18 months ago on components for the new models.
The firm will expand by adding 14 presses from 500-1,400 tons at Clyde, bringing total presses to 130, he said. ``Most of the presses are in the facility at this time.''
Production is beginning and should achieve volume levels starting in January.
Recently, Titan has invested $8 million for injection molding machines and related infrastructure in Clyde. ``That $8 million of investment will support $34 million in new business growth'' that will take place beginning in 2006 and reach a peak by the end of 2007, Botner said. Sales growth of about $16 million is projected during the project's first year.
The Clyde plant opened in 1989 to serve nearby Whirlpool assembly plants. An expansion in 1992-93 and later organic growth led to the facility occupying 204,000 square feet. On available land, ``we can expand by another 75,000,'' if necessary, he said.
In 2003, Titan invested $3.3 million in the Clyde plant as part of absorbing substantial Whirlpool work previously done in a Stevensville, Mich., operation that Titan closed.
Since 2002, the Clyde facility has increased its business volume by more than 25 percent and reduced its head count from 600 to the current level of about 340, Botner said. In boosting productivity, Titan used automation systems, lean manufacturing practices and kaizen methodologies.
An Ohio agency awarded a 60-percent tax credit valued at $518,630 over a 10-year term for Titan to expand the Clyde operation. Titan agreed to retain 343 jobs and create 100 more jobs during the first three years of expanded operations. Titan is required to maintain operations at the site for 20 years.
Calculated on new payroll, the credit will apply to Titan's primary business tax in the state, said Bill Teets, spokesman for the Ohio Department of Development.
The department's advisory Ohio Tax Credit Authority approved the credits during a Dec. 5 meeting in Columbus.
Titan wants more Ohio help. ``We are working with a state agency [to obtain] $1.5 million for capital financing,'' Botner said.
Ongoing Titan operations in Clyde; Brampton; Charlotte, Mich.; Poplar Bluff, Mo.; and McAllen, Texas, are projected to employ 920 after the Brea closing.
Botner said 2005 Titan sales would approximate $175 million. ``Despite the rising cost of materials and pressures on cost and health care and energy, we continue to win new business, especially throughout the Midwest and Texas,'' Botner said. ``We remain optimistic.''
Recently, Titan named Mike Troyer as sales director in the firm's Bannockburn, Ill., office.
Portage, Mich.-based Titan, which focuses on molding precision plastic parts, was formed from the mergers of Wollin Products, DP Enterprises, Plasticos IGA, Plastic Engineered Components and Custom Moulders Ltd. between 1995 and 2001.