Auburn Hills, Mich.,-based Faurecia North America is hiring and laying off automotive workers almost simultaneously in recent months, as its seating business continues to expand but a separate automotive interiors business struggles with falling production orders.
Faurecia, a subsidiary of French auto supplier giant Faurecia Group, recently finished hiring 90 new employees in an $8 million Sterling Heights, Mich., plant upgrade. The project received a $350,000 performance-based grant from the Michigan Economic Development Corp. to Faurecia Automotive Seating LLC last fall, said North America communications director Tony Sapienza.
But the company is also letting go of 105 mostly production employees at a separate Faurecia Interior Systems plant in Sterling Heights effective July 1, and another 130 interiors employees in Fraser, Mich., starting July 1, according to layoff notices filed with the state Workforce Development Agency under the federal Worker Adjustment and Retraining and Notification Act.
"The demand was not as high in interiors as anticipated," Sapienza said. "It's not any single [automaker] customer or product, we're not going to name anyone specifically, but the amount of production that we need now is just too supported at those facilities."
Faurecia North America, comprising the supplier's interiors, exteriors, seating and emissions control technologies businesses, accounted for $6.4 billion of the parent company's $23 billion in global revenue for 2015 and employs more than 20,000 people in the U.S., Canada and Mexico out of the parent company's 103,000 employees in 34 countries.
On June 3, the company dedicated a newly built seating plant in Simpsonville, Ky., which started production in May to supply seats for the nearby Ford Motor Co. Kentucky Truck Assembly plant outside of Louisville, and plans to employ 500 when it reaches full capacity. It is in a "pilot phase" of production now with nearly 400 employees and held a job fair this week to hire even more, Sapienza said.
Last October, shortly before it obtained the MEDC assistance in Michigan, the company also announced that its Interior Systems plant outside Tuscaloosa, Ala., would lay off more than 130 of its 282 employees by December.
Interiors has been a struggling industry segment even outside of Faurecia, experts said. Auto analyst Mike Wall of IHS Automotive noted that Johnson Controls Inc. has shifted industry focus away from interiors to other businesses, and the segment has faced strong OEM cost pressures and commoditized or undistinguished product lines.
It spun off its interiors business into Yanfeng Automotive Interiors and now holds a minority share of that joint venture.
"In the past it had been a tougher segment to be in, because it's got cost pressure and had become somewhat commoditized, but that may begin to change a bit soon," Wall said. "We're seeing a bit more interior players getting creative with their products and because consumers spend so much time in their cars and are demanding content in their vehicle, so you're seeing more of a push for technology into vehicles and for new creature comforts."