DETROIT -- Valeo SA will close its Rochester, N.Y., plant that makes wiper systems by Aug. 1, 2008.
Keeping the plant open until then hinges on Valeo working out a plan with the local union, IUE-CAW Local 509, to make it more competitive, said Walter Kneuer, executive vice president of Valeo Electrical Systems Inc.
Without a deal, the plant could close earlier, Kneuer said Thursday.
Valeos contract with the union calls for it to pay workers in Rochester, even if production stops, Kneuer acknowledged. Valeo bought the plant in 1998 from ITT Industries.
It is our goal to work with the union to find a way to make the appropriate modifications to keep the facility open until the end of the contract, Kneuer said.
But the plant will close. It was doomed by the combination of falling production at the Big 3, especially main customer General Motors, rising prices of raw materials and pressures from automakers to cut prices, Kneuer said.
The Rochester plant is part of the French parts suppliers Valeo Electrical Systems Inc. subsidiary. It was the site of turmoil in December 2001 when the money-losing subsidiary filed for Chapter 11 bankruptcy.
When the subsidiary emerged from bankruptcy 10 months later, Valeo was able to shed 1,550 jobs and get concessions in the labor contract.
Valeo officials in North America were optimistic about the plants future in early 2003, after Valeo had won the majority of the contract to supply wiper systems to General Motors for its next-generation full-sized pickups and SUVs, known internally as the GMT-900 program. Valeo was to supply 75 percent of the volume of wipers for the program and help the plant at least break even financially.
No one expected the volume in North America to drop so dramatically, Kneuer said. Weve been trying to grow our business with the transplants. But were still dependent on the traditional American manufacturers.
Valeo plans to continue supplying wipers from its other plants, including those in Mexico.
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