An Auburn auto parts supplier cut its workforce in half Friday after losing a key contract, a corporate official confirmed Monday.
Its sister plant in Pierceton cut a quarter of its workers for the same reason.
Contech Castings on Friday eliminated 130 Auburn jobs that paid $10 to $15 an hour, depending on skills and time on the job, said Robert LaCourciere, Detroit-based vice president of sales and communications for Revstone Transportation Group.
The Pierceton location cut 40 jobs of about 160, he said.
Private equity firm Revstone Industries acquired auto part plants in Auburn and Pierceton from bankrupt Contech LLC for $13 million in June 2009.
Contech Castings, 1200 Power Drive, Auburn, is now part of the Revstone Cast Metals family, according to its website.
The Kosciusko County plant is at 5 Arnold Drive, Pierceton.
Company officials notified the Indiana Department of Workforce Development by phone to request a rapid response team from WorkOne Northeast to meet with the former workers, offer guidance and coordinate services.
Typically, employers making massive job cuts must file a notice to comply with the Worker Adjustment and Retraining Notification Act. But a WARN filing, which serves as 60 days’ notice before job loss, isn’t required if the situation was unforeseen, such as sudden loss of a contract, said Joe Frank, spokesman for the Indiana Department of Workforce Development.
That’s exactly what happened, LaCourciere said.
The job cuts were chosen based on which work lines supplied that lost contract, he said. Machine operators and skilled workers were included, resulting in a proportionate reduction in all areas, LaCourciere said.
To not react would have put everything else at risk, he said.
Norm Yoder, Auburn’s mayor, was unaware that Contech Castings workers were losing their jobs.
This is not a good sign, he said.
Auburn, which has about 12,800 residents, is north of Fort Wayne in DeKalb County.
DeKalb reported 8.9 percent jobless rate in December, a full percentage point higher than Allen County, which reported a jobless rate of 7.9 percent.
Pierceton has about 1,000 residents. Kosciusko County reported 7.4 percent unemployment in December.
Yoder hopes the action is simply a reflection of a weak economy rather than problems with the company. As much as he doesn’t want to lose any jobs, Yoder definitely doesn’t want to lose all the jobs.
The displaced workers will be the first considered in cases of turnover or new contracts signed, LaCourciere said, but the factory workers shouldn’t expect a recall any time soon.
It’s not a market situation, he said. It’s a loss of business.