As Big Three auto executives Thursday made their pleas to lawmakers in Washington for a $34 billion bailout package, Capital Region manufacturers tied to the automotive industry had less to sweat about —maybe because those with the most to lose from Detroit’s failure have already lost everything.
It has been two decades since the region got a good taste of the devastation the auto industry’s woes can unleash on the economy. On Nov. 30, 1988, Ford Motor Co. closed its Green Island radiator and core-heater plant, which had operated for 65 years and employed up to 1,500.
The Ford closure was followed by the 1997 demise of Campbell Plastics, the Rotterdam company that once employed 500 and made plastic parts for the auto industry. Ward Products Corp.’s antenna manufacturing plant in Amsterdam, which once employed 340, closed in 2006 despite Ford and DaimlerChrysler Co.’s attempts to keep their supplier alive.
As the Big Three teeter on collapse, executives at what remains of the area’s automotive-related manufacturing industry said they are better positioned to weather Detroit’s storm.
“If any of the Big Three enter a pre-packaged Chapter 11 reorganization plan, it is conceivable that the impact on suppliers would be modest: not necessarily creating the cascade effect that makes so many politicians afraid,” said Raymond Dufresne, the chief executive officer of Colonie industrial press maker Bruno Machinery Corp.
After federal lawmakers in November rebuffed General Motors Corp., Ford and Chrysler’s request for $25 billion in federal funds, executives from the auto makers returned to Washington Thursday. They arrived with recovery plans and dire warnings. Without emergency funding, they said, GM and Chrysler could collapse this month.
The nation’s motor vehicle and parts industry employs 733,000, and the Big Three directly accounts for 239,000 of those jobs. But the Center for Automotive Research in Ann Arbor, Mich., last month warned that the failure of Ford, GM and Chrysler would result in the loss of 3 million U.S. jobs within one year.
About half of Bruno’s press business is auto-industry related, down from about 65 percent a few years ago. Dufresne runs the reorganized version of Bruno, whose original owner lost control of the company after it filed for Chapter 11 three years ago.
It was largely Bruno’s over-dependence on the auto industry that drove it to bankruptcy when the company was housed on the Troy waterfront. The reorganized Bruno employs eight while its predecessor employed about 40.
Bruno’s presses are used by parts suppliers of both Big Three and foreign transplant auto makers to produce air bags, interior trim lining and carpeting. But its presses also are used for textile and other applications.
Although that diversification buffers Bruno from the auto industry’s woes, Dufresne noted “Our customers' business has been affected by the depressed unit sales of the industry and we’ve had some press orders deferred.”
In Schenectady, industrial press manufacturer Rhino Equipment Sales and Services has also taken the diversification path. Presses made by Rhino have been used by suppliers of the Big Three and foreign transplants, such as Toyota Motor Corp. Its heavy equipment is used to make everything from foam for car seats to home insulation. Four former Bruno employees last year established Rhino in a Crodell Road building, near Mohawk Commons.
“Any impact on any of our customer base will have an impact on us, but we’re diversified,” said Rhino Director of Engineering Dave Elfeldt.
Specialty Silicone in Ballston makes silicone automobile windshield wipers. But because that product is sold on the aftermarket and not put on new cars before they roll out of the factory, Specialty Vice President of Sales and Marketing Paul DiCaprio does not expect to be greatly affected by Detroit’s internal problems. Specialty employs 47.
“People are still going to buy cars,” regardless of whether they’re made by the Big Three or foreign manufacturers, DiCaprio said.
A representative for Racemark International did not immediately return a call seeking comment. The Malta company makes automotive floor mats, trunk mats, seat covers and seat vests.