THE GOSHEN NEWS
A federal judge has denied a union request that would have stalled Cequent Towing from moving its Goshen operations to Reynosa, Mexico.
“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,” U.S. District Court Judge Robert L. Miller wrote in a Wednesday ruling.
Cequent is owned by Detroit, Mich.-based TriMas Corp. Company officials announced plans to close the Goshen plant last year. The operations and work performed there are set to be relocated to a Cequent-owned facility in Reynosa.
The Goshen facility manufactures hitches, weight distribution systems, fifth wheels, underbed structures and gooseneck systems, and employs approximately 450 people.
The Local 9550 and United Steel unions had sought the injunction against Cequent “until the parties can arbitrate the issue of whether Cequent’s move to Mexico is a violation of the parties’ collective bargaining agreement.” Company officials have agreed to proceed to arbitration on the unions’ grievance.
In part, the unions characterize Cequent’s planned move to Mexico as “outsourcing,” an act in violation of the collective bargaining agreement.
Cequent officials plan to close the Goshen plant at the end of this year. According to court documents, the first lay-offs will take place at the end of February, the work force will be down to half after July, and the plant will remain open and operating until December.
The unions also say company officials are already considering a sublease of the Goshen facility. Cequent presented testimony from Chief Operating Officer Michael Finos that the company would not enter into any sublease while the arbitration is on-going.
“(Finos) said, too, that even though a Goshen business is interested in subleasing the facility, that company doesn’t need the space until the end of the year, which coincides with Cequent’s current plans,” court documents read.
Union representatives say the Goshen facility is profitable for Cequent, and Finos testified that the plant is “above break even,” with some product divisions showing a profit and some not.
However, according to court documents Finos also testified that “production at the plant has been down over the last 10 years and fixed costs have gone up, which has had a major impact on the company’s profit margins and has caused the cost of the products to rise; higher product costs have made it more difficult for the company to acquire new customers.”
The unions presented testimony from Goshen Mayor Allan Kauffman that the “public interest” would suffer if the injunction wasn’t entered.
“Mayor Kauffman testified that the loss of jobs resulting from closure of Cequent’s Goshen plant would increase the city’s unemployment rate, decrease the monies available to the city of Goshen and Elkhart County from the loss of local option income taxes, economic development taxes and property taxes, and negatively affect the local business communities,” Judge Miller wrote in his ruling. “Cequent didn’t challenge the mayor’s conclusions in this regard.”