- Dana Thermal Products is closing its Auburn Hills plant due to lower-than-expected demand for electric vehicles.
- International Automotive Components (IAC) Group is laying off workers in Mendon and Alma as Ford ends production of the Escape and Corsair SUVs.
The auto supplier industry in Michigan is losing nearly 450 jobs as two major supplier companies close shop due to volatility in the car industry related to electric vehicle production and the end of two SUVs made by Ford Motor Co.
According to Worker Adjustment and Retaining Notifications (WARN) filed with the state this month, automotive plastics parts supplier International Automotive Components (IAC) Group in Mendon and Alma and Dana Thermal Products, which makes battery cooling plates, in Auburn Hills, are all permanently closing facilities.
“I can confirm that Dana has made the difficult decision to close our manufacturing facility located on Giddings Road in Auburn Hills,” Craig Barber, spokesman for Dana Incorporated, told the Detroit Free Press. “This decision is the result of the unexpected and immediate reduction in customer orders driven by lower demand for electric vehicles, which has rendered continued operations at the plant no longer viable. Dana continues to operate our driveline manufacturing facility in Auburn Hills.”
Dana manufactures driveshafts, primarily for light trucks and SUVs, at its driveline facility, Barber said. He declined to say how many employees the company maintains at that facility.
Glenn Stevens, executive director of MichAuto at the Detroit Regional Chamber, told the Free Press that the closings are part of the “multiple forces at work” impacting Michigan’s supplier industry.
“Unquestionably, the increased costs and uncertainty surrounding trade policy and tariffs are affecting companies. At the same time, we continue to experience the effect of the retraction of investment in EV programs,” Stevens said of the supplier community’s challenges. “Additionally, and underscoring the complexity of this intricate and complex global supply chain, we have the disruptions caused by a fire at a supplier facility and now a looming chip shortage. Yet again, we see how Michigan is disproportionately susceptible to these challenges, but we also see the industry’s resilience.”
As the Detroit Free Press has reported, Detroit automakers face a possible semiconductor chip crisis due to a dispute between the Dutch government and a Chinese-owned chipmaker. It could put the brakes on much of their new car production. Likewise, a fire that destroyed part of the Novelis aluminum plant in New York last month could cost Ford up to $1 billion in lost profits and lead to temporary plant layoffs if it has to pause production.
A drop in EV demand
Dana’s WARN filing dated Oct. 8 said its indirect subsidiary Dana Thermal Products in Auburn Hills will lay off of a total of 200 employees. The process started Oct. 9 and will run through the end of January.
According to an August 2022 news release from Gov. Gretchen Whitmer’s office, Dana Incorporated — based in Maumee, Ohio — employs more than 40,000 people in 31 countries. The Auburn Hills plant opened in 2022 to make battery cooling plates, cold plates and power electronics for global automakers.
At the time, Dana expected the EV market to be “one of its largest opportunities for growth,” the release said. It was investing to position itself as a leader in EV technologies. The release said the Auburn Hills plant was “expected to generate a total capital investment of $54.2 million and create 200 jobs, supported by a $2.5 million Michigan Business Development Program performance-based grant.”
In the third quarter, sales of EVs comprised 11% of all new car sales, topping the previous high of 8.7%, according to Cox Automotive. Car buyers purchased 438,500 EVs in the quarter, a new quarterly record, as many buyers hurried to take advantage of federal tax incentives on EVs before they expired on Sept. 30.
Now that those federal tax incentives are gone, many analysts predict EV sales will stall.
EVs have also been profit-losers for many automakers due to the cost to make the pricey batteries. General Motors took a hit to its third-quarter earnings due to production changes of EVs. GM also warned last week in an Oct. 14 8-K filing that unused EV production equipment and canceled supplier contracts would cost it $1.6 billion in the third quarter.
IAC Group’s job cuts
Meanwhile, IAC Group, which bases its North American operations in Southfield, said in a WARN notice dated Oct. 8 that it will permanently lay off 178 people when it closes its IAC Mendon factory in Mendon. Mendon is about 20 miles southwest of Battle Creek. The notice said some of the workers will have bumping rights, meaning a more senior worker could bump a less senior worker out of their job if that less senior worker’s job has not been eliminated.
Additionally, the company will permanently lay off 68 workers at IAC Alma in Alma, about 40 miles north of Lansing, it said in a WARN noticed dated Oct. 8. Both layoffs will occur on or about Dec. 8, the filings stated.
IAC Group spokeswoman Ann Miller sent a statement to the Detroit Free Press late in the evening of Oct. 23 saying: IAC Group has informed employees at manufacturing sites in Mendon and Alma that, “we will curtail operations beginning December 2025 to adjust to lower cyclical demand. We are actively collaborating with the local union to support those affected by this action, which we anticipate will be temporary. We look forward to recalling employees as production requirements increase.”
The UAW did not provide a request for comment.
But according to a statement given to Kalamazoo television station WMMT, Frank Hines, UAW International Servicing Representative and a member of Local 503, said the 178 job cuts are “a direct and unavoidable consequence of a major, planned transition by our customer, Ford Motor Company. As the Ford Escape and Lincoln Corsair models — for which we build interior components — reach their end of life, the Louisville Assembly Plant (LAP) is scheduled for a 10-month shutdown starting in December to undergo a massive retooling process. This stops the demand for the interior door panels we produce.”
Ford’s changes to production
In August, Ford said it would stop production of the Ford Escape and the Lincoln Corsair SUVs at year-end to start retooling the plant where they are made: Louisville Assembly in Kentucky. Ford will then build a new all-electric midsize pickup at that plant due to launch in 2027.
Hines said in his statement: “The Future is Here: The good news is that Ford is making a significant investment of nearly $2 billion into the Louisville plant to convert it into a hub for affordable electric vehicle (EV) production. The plant will return online in 2027 to build a new, low-cost EV pickup truck. IAC Mendon is not closing; our facility remains open and is actively bidding for the interior component work.”
According to Crain’s Grand Rapids Business, these job cuts come about two years after IAC Group received an $800,000 performance-based Michigan Business Development Program grant to support a $20.6 million capital investment in Alma and Mendon and create 273 new jobs. The Michigan Economic Development Corp. said IAC selected Alma and Mendon over Ohio for its expansion. It also planned to move production programs from Indiana to Michigan.
According to Plastics News, IAC Group is headquartered in Luxembourg. It is the second-largest plastic injection molding company in North America and last year it generated $1.3 billion in sales from injection molding. It has about 18,000 employees at 55 locations in 17 countries.
Jamie L. LaReau is the senior autos writer for Gannett. She covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.