Nixa-based Diversified Plastics Corp. may reap benefits from the Automotive Manufacturing Jobs Act, signed July 15 by Gov. Jay Nixon to support Missouri’s automotive industry and jobs. But any production gains in Nixa rest in the hands of Ford Motor Co.
The law allows Missouri manufacturing facilities and suppliers that meet certain requirements to retain state withholding taxes, and it was influenced by the possibility of Ford moving production lines out of its Claycomo plant near Kansas City.
“If they can manage to keep that plant open in Kansas City, it’s a win for Missouri and a win for us,” said Ken Magers, Diversified Plastics president.
Diversified Plastics works with the automotive, packaging and construction industries, and has contracts with Ford to produce parts for headliners and a “dead pedal,” or the rest pad for a driver’s left foot, said Shane Bostian, quality director at the Nixa plant.
Bostian said Diversified Plastics also molds foam and injected plastics for crash absorption in vehicle dashboards and doors. About 60 percent of the plant’s business is related to the automotive industry, with contracts to produce foam for Ford, Chrysler, General Motors and Honda, Bostian said, declining to disclose revenues for the privately held company.
“The name of that game is proximity,” Bostian said. “If you’re a molder, you’re going to get business in your backyard. If they move (the Ford plant) to Mexico, there goes all your potential business.”
Even with the new law, Ford officials have not made a decision about production in Claycomo.
However, Ford President and CEO Alan Mulally has accepted an invitation to Nixon’s Conference on Economic Development, which runs Sept. 15–17 in Kansas City.
Nixon has said Ford’s Claycomo facility supports more than 40 Missouri suppliers that employ thousands of workers statewide.
“While much of the attention has been on the jobs here in Claycomo, the benefits of this bill will be felt far beyond the Kansas City area in all parts of Missouri,” Nixon said in a news release.
The potential to keep orders and jobs at a hometown company is why Missouri Rep. Jay Wasson, R-Nixa, voted for the act.
To qualify for the tax-credit program, Wasson said Diversified Plastics would have to meet the following requirements: More than 10 percent of its business must be with Ford; Diversified Plastics must pay an average wage for the southwest Missouri area – $650 per week for fourth-quarter 2009, according to the Missouri Economic Research and Information Center; must offer health insurance; and make a “substantial” investment in production.
Bostian pointed to lower shipping costs to send materials produced by his company to the Claycomo Ford plant near Kansas City as an advantage in winning future Ford business.
“As long as the plant is open, we have the potential to get business with them,” Bostian added.
Although he said the immediate job-creation benefit for Diversified Plastics is unknown, new jobs are possible. The company employs about 200 in its 80,000-square-foot manufacturing plant and 140,000-square-foot warehouse and tool shop.
“If we got a number of new contracts because that Ford plant stayed there, your work force has to stay in sync with that,” Bostian said. “It could potentially add a few more.”
The Escape, F-150, Mazda Tribute and Mercury Mariner are produced at the 4.7 million-square-foot plant that employs 3,914, according to www.media.ford.com
. Bostian said he’s unsure what model might be produced at the plant but believes it would be “a refreshed version” of the Escape, a crossover sport-utility vehicle.
Haig Stoddard, a 20-year automotive analyst with Global Insight, told Kansas City Business Journal his studies of Ford’s compact car production plan indicate Claycomo and a plant in Wayne, Mich., have the highest probabilities of closing. Stoddard said Ford is building a plant in Michigan that will use the new platform for its Focus to handle the new platform by 2011.[[In-content Ad]]