Battery-Maker Move From Mexico to Ohio

[OntarioVanMan]

FREMONT -- In a reversal of past national trends, a company in Fremont that makes automotive and industrial batteries has purchased the assets of a factory in Mexico with the intention of moving the operation's production to Ohio.

Crown Battery Manufacturing Co. said its purchase of a division of C&D Technologies Inc., will add $40 million in sales to Crown and create 20 to 30 jobs at the Fremont facility.

Hal Hawk, president and chief executive of Crown, said the company is seeking financial assistance from the state of Ohio to move equipment from the plant in Reynosa, Mexico, which is on the Texas border. It hopes to have the work shifted in three to six months.

"We will move everything back to Ohio," Mr. Hawk said. "It's kind of unusual in these days for that to happen, but we found that our people in Fremont can actually do a better battery than people working for $1.81 an hour in Mexico."

Crown, with annual revenues of $135 million, makes replacement batteries used in autos, trucks, boats, golf carts, and other vehicles. It also makes industrial batteries used for forklifts, mining vehicles, and railroad cars.

The sale price for the Mexico plant was not disclosed.

The reason for moving jobs back to Ohio, he explained, is "the Mexican model no longer works."

There is a huge savings in wages -- it's $1.81 an hour in Mexico and $11 an hour at Crown. In Fremont, the wage could rise to $16 an hour with experience.

"But what's happened is [Reynosa's] turnover rate is high, their quality is poor, and the transportation costs with the high price of gas now make their overall costs go through the roof," Mr. Hawk said.

Economist Jim Coons, of J.W. Coons Advisors LLC in Columbus, said the Crown situation is taking on more notice nationally.

"It is a perfect example of why wage rate alone is no longer the whole story when it comes to business," he said. "You have to look at adjusted productivity. That $1.50 an hour or $5 an hour wage is not necessarily such a bargain when you factor in currency, productivity, and transportation."

Fuel costs, Mr. Coons added, have become an increasingly important factor. "In many cases, they are a tipping point," he added.

Crown Battery employs 300 workers in Sandusky County and 105 at sites in four other states and Canada.

The battery company is owned by a group of 10 officials who bought it in 1998 from its longtime owners, the William Koenig family.

The seller of the Mexican operations, C&D Technologies, of Blue Bell, Pa., makes control systems and backup power gear for telecommunications, utilities, and solar power units. Its battery division no longer fit with the company's core manufacturing.

The transaction also includes a five-year deal with Crown to market three of the Fremont firm's battery lines and Crown will supply C&D with warranty coverage for certain batteries.

Under terms, Crown will get three distribution warehouses in Los Angeles, Buffalo, and Toronto, Canada.

Mr. Hawk said that at 170,000 square feet, the Fremont plant has room to accommodate new work and equipment. The company added 11 workers in anticipation of the work moving north. Plus, a supplier to the Crown plant has indicated it will add 12 jobs, he added.

"We have capacity, but it all depends on how fast we can move things up here," the CEO said.

[Tennesseahawk]

Sure... why spend money in Mexico, when you can get Mexicans here.

If he's hiring actual AMERICANS, then good for him! I hope this would be a continuing trend. Bring back American manufacturing. Unfortunately, this would also strengthen unions, which screwed us up in the first place.

-True independence can only be gained if you're trully independant.

[sanbomi1]

Let's hope this will start a trend on bringing jobs back to the U.S.

I have seen first hand where many assumptions are made when a decision has been made to send production to a foreign country. Sometimes the big picture is not taken into consideration. The objective is cost savings, but, what is the real cost in reaching that dollar amount? Sometimes companies spend a dollar to save a dime.

We all know what happens when you assume.

Regards,

Mike

[arkjarhead]

Just because manufacters come back to the states doesn't mean the unions have to be there. I know plenty of factories around here that make decent money and there is no union. My brother in law works at one. Maybelinne. I know a local air conditioner plant sent a line to Mexico. Well the cheaper workers did a cheaper job and Lennox had to pay all the Americans to work overtime to fix the problem. Needless to say that line came home fast.
We were discussing something similar to this in U.S. History class today. That in the past there have been high tariffs placed on imported goods so it wouldn't be economical for people to buy foreign goods. Then most everybody bought American and it stimulated the economy. The American worker turns out a good product they just want to be compensated for it, and as long as they don't get to greedy there shouldn't be a problem.
I think we should raise the tariff on imported goods to sky high. I mean why not? If you want to but say $100.00 of chinese steel that's fine but were gonna charge you $200.00 in taxes. Seems to me that would only boost the economy.
Finally the high fuel price has helped us out a little.

[greg334]

Hate to pee on your parade but.....

Jobs imported from Mexico - 20 to 30

Jobs exported to Mexico(enterprise zones)/China(slave labor) for the same period - 7000

Reason is not just labor, but the real reason is taxes.

http://www.fairtax.org

It is like the Michigan commercial, a business moves from San Francisco to Ann Arbor to product connectors but the commercial does not show that the only reason they moved here was to bring in labor from Canada as contractors and reduce the FTE by 80%. No gain for Michigan, they gave too many tax breaks to the company in the first place.

[redytrk]

Crown batteries in my truck. Great performance. Fair price $84.00 ea.

[Tennesseahawk]

Greg... you know it's all about the PERCEPTION that Comrade Cocopuff is bringing all these jobs to Michigan; when in fact she's running them out with her anti-capitalist cat-o-nine-tails.

-True independence can only be gained if you're trully independant.