Gill Industries is a supplier of seat structures, mechanisms and other components to the automotive, off-highway vehicle and furniture markets. Courtesy Gill Industries
A pressure cooker of coinciding dynamics is causing Gill Industries to make some adjustments to its local operations heading into the new year.
The Grand Rapids-based supplier of seat structures, mechanisms and other components to the automotive, off-highway vehicle and furniture markets told the Business Journal recently it is in the midst of mapping out a new plan for the company’s local production footprint in step with three recent major developments.
Its three Grand Rapids-area production operations will be consolidated into one 135,000-square-foot manufacturing facility at 5271 Plainfield Ave. NE, at the same campus where its 21,000-square-foot corporate office is located.
Bond plant wind down
During the past several months, Gill Industries began reevaluating the use of its production facility at 706 Bond Ave. NW in downtown Grand Rapids’ Monroe North area, one of its three manufacturing centers in Grand Rapids.
The Bond facility formerly housed Grand Rapids Spring & Stamping, which Gill Industries acquired in 2014, and the plant is currently home to 18 metal stamping presses that produce components for “value-add” and assembly at other Gill locations.
David DeGraaf, president and CEO of Gill Industries since April 2018, told the Business Journal the decision to sunset the Bond plant was made strategically in response to the changing neighborhood composition.
“Grand Rapids grew up kind of around us, if you will,” DeGraaf said. “Right next to our Bond facility is a brand-new, beautiful hotel, and (there are) a lot of new residential complexes that are coming in place. So, we thought, ‘Let’s see what our options could be.’ We explored that opportunity, and we did a quiet marketing (to see) if somebody might be interested in the property, and sure enough, somebody was very interested in the property.”
The interested party was none other than Spectrum Health, which announced in October that it is planning to construct a new administrative and training facility on the property, as it is “within walking distance” of the health system’s other facilities on Medical Mile.
While details of the sale, Spectrum’s plans and the project cost have not been disclosed, Gill Industries already has taken action to wind down its plant to make way for the changes.
The manufacturer began working with its customers on the wind-down plan in late October and expects to complete the Bond plant closure sometime in the first quarter of 2020.
The move was not without headwinds.
On Nov. 8, Gill customer Benteler Automotive, a German company with its North American headquarters in Auburn Hills, filed a lawsuit against Gill Industries, alleging breach of supply contracts and just-in-time scheduling agreements that would allegedly jeopardize Benteler’s position in the global automotive supply chain.
Gill and Benteler settled the lawsuit Nov. 21. DeGraaf said in a statement after the settlement that Gill took the “normal course of action” in working with its customers to reach a mutually agreeable wind-down process and that “all other customers” have been satisfied with the deal that was worked out, except Benteler.
Yves Ostrowski, head of communications and marketing for Benteler Automotive, said in a statement that the company was “pleased” to have settled the suit and it was able to maintain the timeliness and quality of its deliveries to its customers.
The UAW strike
Coinciding with Gill’s decision to shutter the Bond plant, about 48,000 unionized United Automobile Workers (UAW) went on strike at about 50 General Motors plants across the U.S. this fall, demanding better pay and benefits, increased job security and a path to permanent employment for temporary workers.
The strike lasted from Sept. 15-Oct. 25. Although Gill is a private company and does not disclose financials, DeGraaf said the halt to production at GM plants “hit (Gill’s) business substantially,” as Gill has supplier contracts with GM, in addition to its other contracts with Ford, Fiat Chrysler, Nissan and Toyota.
Instead of absorbing the strike’s impact to its bottom line by laying off workers, Gill secured help from “many of its customers” who brought additional work and potential new investors to Gill’s doorstep in order to keep all of the company’s 1,800 employees working — 515 of which are in Michigan.
“That was a very challenging period,” DeGraaf said, noting that a significant portion of the Gill Industries footprint is configured to produce components for automakers such as GM.
“It did put a strain on the number of hours that we had available for people to work, and then naturally, it put a huge strain on the financials. (But) working with some of our other customers, they were able to increase some of their build requirements, so they took additional inventory from us. That way, we could keep people working. We (also) have a great workforce that was willing to move shifts around so we could keep as many people working as possible. It was really cool to watch how that transpired.”
DeGraaf added this was the first time in his 20-plus-year manufacturing career that circumstances have aligned in such a favorable way to prevent layoffs during a major setback like this one.
The Alpine plant
Gill’s third and final Grand Rapids-area plant — serving primarily Nissan and Toyota — currently is located at 2180 Avastar Parkway NW in Walker, off Alpine Avenue. Gill calls it the Alpine plant, where the “value-adding” and assembly of components that are stamped at Bond takes place.
In December 2018, Haviland Enterprises spent $4 million to purchase the Avastar Parkway facility Gill was leasing and did not renew Gill’s lease, which was set to expire in 2021, according to a previous Business Journal report.
The move forced Gill to find a new home for all of the equipment and employees housed at the location.
DeGraaf said the company decided to consolidate all three plants into its Plainfield location after determining there were internal efficiencies and reconfigurations that could occur to “get things tighter” on the shop floor, as well as some space that was being freed up by the natural end of some production programs on the part of Gill’s customers.
Gill expects to complete the migration of all equipment and employees into the Plainfield location “sometime in 2020,” but it will depend on what type of build-out, equipment and tooling changes are needed to satisfy its customers’ needs, DeGraaf said. Another important aspect that adds time to the process is ensuring the safety of the equipment and workers during the consolidation.
“There are a lot of factors that we have to weigh in how that business migrates over here,” DeGraaf said.
He said one of the company’s top goals during the transition will be “to keep the Michigan employee count as high as possible.”
“That’s one of the things that we’ve been doing in the planning process is how do we map (this) out, because … some of the employees have been here for years and years and years. That’s knowledge, skill and expertise that is extremely valuable to the company. We want to move those people with us.”
In addition to its Grand Rapids-area plants, Gill Industries has U.S. manufacturing sites in Richmond, Kentucky; Trenton, Georgia; two plants in Mexico and another in Ireland; and a U.S. sales office in Southfield.
DeGraaf told the Business Journal last month that the company “consistently reviews all options” at its sites to best meet customer needs, and no definitive changes are planned for the sites outside Michigan “at this time.”