Local Tower Automotive plant courting investors

By JIM BROOKS
Nelson County Gazette

Tower Automotive's Bardstown facility may soon become a division of Toyota Motors Manufacturing, according to several sources both inside and outside the company.

The local Tower plant has historically been one of the company's few money-making facilities. It's success with meeting production schedules for vendors -- primarily Toyota -- makes it one of Tower's star properties.

The Novi, Mich.-based company filed for bankruptcy protection in February 2005. Since then, the company has announced plans to close several Tower facilities, and has asked union employees in other facilities for wage and benefit concessions.

None of those concessions have been sought from workers at the Bardstown facility, which is non-union.

Representatives from Toyota have been in town visiting the Bardstown facility, sources say. Additional visits from investors or their financial representatives are scheduled next week.

According to one source, of all the Bardstown plant's possible buyers, Toyota would probably be the best of the bunch. With the Georgetown plant just a short drive down the Blue Grass Parkway, it's an sensible move for both companies.

The production cutbacks among U.S. automakers has trickled down to parts suppliers, and analysts say that Tower, Delphi and Dana will likely be joined by additional supplier bankruptcies over the next two years.

In a March 23rd Bloomberg story, one analysts predicts as many as 15 suppliers may file for bankruptcy protection.

``A lot of companies that have not filed for bankruptcy may be close to a breaking point,'' said Lehman Brothers Inc. analyst Darren Kimball. ``The risks are very high right now,'' he said, citing commodity prices and an inability to get automakers to pay more for parts.

``When I look at 2006, I see a lot of the same pressures I saw in 2005,'' Kimball said. Delphi Corp., the world's largest auto-parts maker, Tower Automotive Inc. and Collins & Aikman Corp. filed for Chapter 11 bankruptcy last year, and Dana Corp. filed March 3 after posting a preliminary loss of $1.6 billion in 2005.

Among the Tower facilities closing or closed include the company's first factory in Greenville, Mich.

Tower has also asked a bankruptcy judge to cancel its union contracts, which the company says would save it $40 million in yearly wages and benefits -- savings it says it needs to survive. Approximately 3,000 of Tower's 4,500 workers are union workers, and those union workers have voted to strike if the union contracts are canceled.

The judge hearing the case has delayed a ruling in order for both sides to have time to negotiate. Published accounts say that the United Auto Workers leaders are not going to be shy to call for a strike at Tower because they want to send a strong message to Delphi, GM's part supplier which also filed for bankruptcy protection last year.

Leaving Tower Automotive for Toyota will likely be a step in the right direction for the local Tower facility. They've worked closely with Japanese automatkers, and have a proven track record.

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