Putting money on the line
Packard is spending millions to upgrade local plants to improve quality and efficiency.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- Delphi Packard Electric Systems is grappling with a decision that hits every homeowner and business owner -- replace or repair?
Decisions to replace cost the company millions of dollars. Packard has had to spend the money, however, to be able to efficiently produce the near-flawless quality that customers are demanding, said John Sefcik, director of manufacturing for U.S. operations.
In the last few years, Packard has committed $100 million to replace plastic injection molding machines in the Mahoning Valley after deciding the old machines just won't cut it anymore. It is also spending millions to upgrade other parts of the local plants.
Every day, Packard officials review the financial numbers tied to operating equipment, Sefcik said. They are looking for the point where the machines are requiring so much maintenance that it makes sense to replace them.
Biggest local investment: By far, Packard's biggest investment locally in recent years has been in the plastic operations. Officials decided that the molding machines at its plant on Dana Street in Warren were too old and the operating environment too harsh to produce quality parts.
A year ago, it opened a plastic operation at its Cortland plant, which cost $42 million to renovate and for equipment. Tuesday, it announced it would cost $58.5 million to build and equip another plastics plant in Vienna Township.
Packard will lease the plant, which will be built by the Western Reserve Port Authority, operator of the Youngstown-Warren Regional Airport. The plant is to be open by the end of 2003.
Other improvements: Sefcik said, however, that Packard's other major manufacturing operations in the Mahoning Valley -- metal stamping and cable making -- also are being improved.
Four new presses are just about ready at its metal-stamping operation on North River Road and six others were installed about a year and a half ago. Each press and related equipment costs about $700,000.
Of the 65 metal-stamping presses at the North River Road plant, 10 are new and the rest are being evaluated, Sefcik said.
Other presses are nearing the end of their lifespans so company officials are reviewing how many new presses are needed and where they should be located, Sefcik said. Officials must evaluate, for example, whether more of the product demand will be in North America or Europe, he said.
Upgrading metal stamping, however, won't require a new plant as the upgrading of plastic molding did, he said. The company has space available on North River Road.
Moving operation: Packard is moving the plastic molding operation out of the Dana Street plant because it didn't have the climate-controlled environment the machines need. The Cortland plant, which will be used as a model for other plastics plants, has a layout that is designed to improve efficiency.
Metal stamping and plastic molding operations make parts that are used in connectors for cars, computers, medical devices and other industries. The connector market is growing so the local business in metal stamping and plastic molding should grow, Sefcik said.
Packard historically has made wiring harnesses for vehicles but is expanding into other markets.
Making cable: The other key part of the local operations is the making of cable, primarily for use in cars and trucks. Sefcik said Packard makes about 55 percent of its cable for the North American market at Warren plants and about 45 percent in Mississippi.
Sefcik said much of the cable-making equipment in the local plants is old and being evaluated.
One upgrading project has been approved and installation is nearly complete. This new equipment, which cost more than $1 million, will improve productivity and quality in the cable extrusion area, Sefcik said.
He said Packard intends to leave cable making operations in this area, even though its Mississippi operation is closer to Mexico, where the finished products are sent. He said it would be too costly to move equipment from Ohio to Mississippi.
Metal stamping, plastic molding and cable making are key parts of the local plants, which employ about 7,000 hourly and salaried workers, because Packard has moved final assembly work to Mexico, where it can be done less expensively. Packard wants the local plants to focus on component making, which involves high-tech machines pumping out large volumes of parts.