Plastech Engineered Products Inc. is closing plants in Leamington, Ontario, and Shreveport, La., as part of its restructuring.
Dearborn, Mich.-based Plastech told workers that the Leamington plant will close May 16. That plant makes plastic body panels and parts for Detroit automakers. It employs as many as 260 unionized workers and 40 nonunion workers.
Plastech's Canadian operations are not in bankruptcy, but its U.S. facilities entered Chapter 11 protection with U.S. Bankruptcy Court in Detroit on Feb. 1.
Jeff Powell, president of Local 1769 of the Canadian Auto Workers union, said the union was set to meet with plant management May 2 over compensation issues. Powell said the company wants to pay workers two weeks for severance notice, but legally the workers are entitled to 12 weeks' pay for severance notice.
``We don't feel they are playing fair,'' he said.
The Leamington operation counts Chrysler LLC's Windsor, Ontario, van manufacturing plant among its biggest customers.
Meantime, Plastech lawyer Gregg Galardi revealed plans to close the Shreveport plant in court. He did not give a time frame for the shutdown of the 225,000-square-foot interior components factory.
The company owns more than 35 plants in North America and employs about 7,700, 70 percent of whom are unionized, according to court documents.
Plastech is seeking ways out of bankruptcy. One of its major customers, Johnson Controls Inc. of Glendale, Wis. - with automotive operations based in Plymouth, Mich. - has confirmed that it has offered to buy Plastech's interiors and under-the-hood operations. Plastech's lawyers also have said they are seeking potential buyers for the firm's exterior and metal-stamping businesses.
Rick Levy, a lawyer for Goldman Sachs Credit Partners LP, said in court April 30 that he was confident about the possibilities of a deal between Plastech and JCI.
JCI and Big Three automakers have said they will finance Plastech's Chapter 11 reorganization through Aug. 30, with a line of credit of up to $87 million. U.S. Bankruptcy Court Judge Phillip Shefferly approved the financing May 1.
Meanwhile, the United Auto Workers has submitted a formal objection to the final financing order, arguing that it does not have enough protection for the roughly 5,400 UAW-represented hourly workers at Plastech plants. The firm estimates severance package costs, called ``plant rationalization costs'' in its recent budget, will total more than $3.7 million.
Niraj Ganatra, associate general counsel with UAW, called the sum ``unacceptable.'' He urged that severance details be worked out sooner rather than later.
Severance packages are not covered by UAW's master agreement with Plastech, but some local contracts require severance packages for its workers.
Galardi said collective bargaining agreements will be honored.
Plastics News Detroit-based staff reporter Rhoda Miel and Ryan Beene, a staff reporter for sister publication Automotive News, contributed to this report.