GOSHEN — A federal judge in South Bend ruled today, Jan. 30, that he won't grant a request by two unions to prevent Cequent Performance Products from moving production out of Goshen to a plant in Mexico.
The United Steelworkers international and local unions filed a complaint in U.S. District Court in South Bend last year after Cequent's parent company, Michigan-based TriMas Corp., announced its plans to shutter its Goshen plant this year and move production to another TriMas-owned facility in Reynosa, Mexico.
“Cequent presented testimony at the preliminary injunction hearing that it plans to continue production and not close the Goshen plant until December 2013,” Judge Robert Miller wrote in his ruling on the union's request for a preliminary injunction.
The unions' “reliance on Cequent's minimal moving of equipment, plans for a sublease at the end of the year and difficulty in reestablishing the work force doesn't establish injuries that can't be fully addressed by an arbitration award or amount to a showing that the arbitration process will be frustrated,” Miller ruled.
The unions represent some 375 production and maintenance workers at the Goshen business, the bulk of the workforce that manufactures trailer hitches.
The company informed the steelworkers union leadership that TriMas planned to move production, and they made the formal announcement to employees right before Thanksgiving.
The company had already moved a few pieces of equipment by the time the unions filed the federal suit in November, seeking to have the company ordered into arbitration with the union workers.
The arbitration process will lead to a ruling on whether the move violates the union contracts that are in effect until next March. The unions argue that moving operations to Mexico qualifies as outsourcing, which is prohibited by the contract, though Cequent argues it's a closure and relocation, which is allowed under the contract.
Before the court hearing earlier this month, the company agreed to arbitration with the unions.
When Cequent notified Miller about the arbitration agreement, they noted the Goshen facility isn't “scheduled to close permanently until the end of 2013 and no employees will be let go until February 22, 2013, more than half will remain employed through the end of June 2013, and the last will remain until December 20, 2013,” Miller noted in his ruling.
While the union argues Cequent is profitable in Goshen, Michael Finos, chief operating officer for Cequent, said some products make a profit and some don't, according to Miller. Finos testified that production at the Goshen plant has reduced over the last 10 years and fixed costs have gone up, leading to increases in product costs which make it harder to get new customers.
Mayor Allan Kauffman testified at the hearing that the loss of Cequent jobs will increase the city's unemployment rate and reduce tax income to the city and county.
The company also said at the hearing that another Goshen company is interested in the building.
“The court sympathizes with the union members who may be laid off and/or ultimately lose their jobs in Goshen, but must conclude that the unions haven't established the irreparable harm or balance of hardships necessary to support the entry of a status quo injunction,” Miller concluded.
Cequent Ruling by