DETROIT - Peregrine Inc. says new equipment at a door-parts plant will help cut up to $10 million in costs annually.
The plant, in Livonia, Mich., will install nine retooled injection presses this year from General Motors.
The presses will mold door trim substrates and map pockets for the Chevrolet Cavalier and Pontiac Sunfire and Grand Prix.
Officials at the newly formed supplier, based in Southfield, Mich., estimate that the molding work will cut $5 million annually in costs to outsource substrates and map pockets to other suppliers.
The move will save another $5 million a year in inventory and storage costs, said J.J. Reynolds, the plant's chief engineer.
Peregrine officials hope the new plastic injection molding operations will help return a once-troubled plant to profitability.
The Livonia plant was one of four GM Delphi Automotive Systems plants that were spun off to create Peregrine last December. Peregrine is spending $20 million to improve the plants this year.
The situation at Livonia was bleak when Peregrine took control, said plant manager Elizabeth Griffith.
'We walked into a situation where employees harbored a certain amount of animosity for years,' Griffith said. 'It was at the point where they didn't trust whatever we said or did. Our job was to change that and climb a high competitive wall, so to speak - and do it yesterday.'
The plant is banking on plastic molding to help spur its reversal of fortune. Not only does the work bring the plant added value, but it acts as a lead for possible contracts with other carmakers, Griffith said. Peregrine does virtually all its work for GM.
Griffith was general manager of Manchester Plastics Inc. in Troy, Mich., before coming to Peregrine in January. Griffith said the plant is considering adding instrument panels to its product mix, and other types of injection molding.
The 49-year-old plant's problems date back to 1986, when GM shifted its seat-cover assembly from the facility. Since then, the plant has lost more than 3,400 people. Currently, 962 people are employed there.
The plant had fallen into disrepair. The roof was in such shambles that it actually snowed inside in January.
Meanwhile, the facility suffered what Griffith called 'horrendous losses'; she declined to reveal actual figures. Delphi reported in recent financial statements that it took a $153 million loss on the sale.
The plant's excess capacity led UAW Local 174 to send a letter to plant management in January 1996. The local, which represents the plant's 706 hourly workers, demanded that GM shift more business to the plant or the workers would strike in five days. Local union officials were unavailable to comment.
To mollify the union, Delphi agreed to bring in the nine injection presses, Griffith said. The equipment was mothballed at a former Inland Fisher Guide plant in Syracuse, N.Y., that closed in 1992. Shipment of the machines did not begin until late last year.