JL French Automotive Castings Inc. announced Monday it will lay off 300 employees in Sheboygan and cut one local manufacturing shift “due to the unforeseen rapid decline of orders.”
The cuts were announced in a press release that hinted more job cuts may be on the way.
Tim Kellner, vice president of human resources, said most of the 300 workers had been on an extended holiday shutdown, but they have now been informed the layoff is permanent. He did not say when employees were informed.
“The speed with which our customers have been reducing their own production expectations has been surprising,” Kellner said in the release. “We can’t bring people back to work like we had planned, and we have to change our manufacturing structure.”
Kellner said JL French — which manufactures die-cast automotive parts — will cut operations from three shifts two at both Sheboygan plants, 3101 S. Taylor Drive and 4243 Gateway Drive. The shift change will be complete by mid-February, Kellner said, adding, “any further job reductions are expected to be completed by then.”
The release did not reveal how many employees JL French has, but the Wisconsin Department of Workforce Development lists the number between 500 and 1,000. The company had employed about 1,200 people in June 2007, officials said at the time.
The layoffs come 18 months after JL French received a $1.6 million forgivable loan from the State of Wisconsin in exchange for the promise of adding and maintaining 100 jobs. Gov. Jim Doyle came to Sheboygan to announce the funding in June 2007, and Kellner said at the time the company “should have no problem living up to that commitment.”
But the economic recession has since slashed demand for vehicles.
“Our order are directly connected to the vehicle build schedules of the domestic automakers,” Kellner said in the release. “Their recent projections of a 28 percent reduction in 2009 vehicle production — off of a level that was already below 2007 levels — causes a large ripple effect to suppliers like JL French.”
Kellner did not return phone calls seeking comment on the status of the loan.
JL French emerged in June 2006 from Chapter 11 financial reorganization, dropping $500 million in debt, closing underperforming plants in Michigan and Mexico, selling an operation in the United Kingdom and receiving $255 million in new financing. In the year that followed, the company invested $28 million in equipment and facilities in Sheboygan, including a 66,000-square-foot aluminum alloy processing plant and storage area at Gateway.
JL French, founded in Sheboygan in 1968, manufactures high-pressure aluminum die-cast automotive parts such as oil pans, engine front covers, engine blocks and transition cases. It is Sheboygan County’s fifth largest employer, trailing Kohler Co., the Sheboygan Area School District, Bemis Manufacturing Co., and Sheboygan County.
The company is also laying off 180 workers at a plant in Glasgow, Ky. No layoffs were announced for its third plant, in Ansola, Spain.
The layoff announcement comes as Kohler Co. weighs another round of work force changes or reductions. Kohler laid off more than 200 employees in three separate moves between mid-October and mid-November, and a union official said earlier this month the company will likely cut shifts or employees across many of its eight divisions by the end of the month.
