Car parts maker’s headcount rebounds

by Gigi Wood

IOWA CITY – A local car parts maker is returning to pre-recession employee numbers.
International Automotive Comp-onents (IAC), 2500 Hwy. 6 E., where workers assemble instrument panels, door panels and armrests, is up to 670 hourly and 75 salaried employees. In March 2009, IAC employed 500 workers.

“That does bring us back to what our operating numbers were a couple of years ago,” said David Ladd, a spokesman for IAC. “I think we’ve brought back almost everyone that was temporarily furloughed over the course of the last year. We’re even hiring some additional headcount, in addition to those.”

The sour economy, which led to a decline in auto sales, resulted in the closing of many auto parts suppliers across the country.

“Last year was very difficult for the whole industry, and that’s the understatement of the week,” he said. “During that time, many suppliers went under. They either filed Chapter 11 or they just went away all together. As a result, car companies looked to other suppliers to help them pick up those programs.”

IAC has struggled domestically but expanded abroad, with a $25 million factory under construction in India to build parts for the growing auto industry there. The company has also opened operations in several cities in China.

“We happened to be one of those suppliers in the position to be able to help many different customers but in particular General Motors where Iowa City is concerned, and bringing some very important programs,” Mr. Ladd said. “If you believe the numbers, there were over 75 supplier companies that went out of business last year; reputable, large companies went out of business. There were supposedly hundreds more that were much smaller, family-owned type businesses.”

The companies that survived the downturn are now in a good position to land contracts.

“This year, there are those companies that made it through the storm and are stronger now, and we’re in a position to be able to pick up business from those other companies that failed or that filed Chapter 11,” he said.
The gap in suppliers has brought new work to IAC.

“We’ve picked up a lot of business, some big programs from some other failed suppliers and some new business,” Mr. Ladd said. “The new business cycle for us is three years. When are we awarded a new business program, it takes about 36 months before it goes into production. In most cases, what’s been happening in Iowa City has been business picked up from failed suppliers that’s already in production.”

For example, IAC in Iowa City is now producing parts for Chevrolet and Buick.

“The best examples are the (Chevrolet) Camaro instrument panel and Buick LaCrosse instrument panel; those are two very big programs we picked up from other failed suppliers, and we basically moved those programs right into our plant in Iowa City and began producing from there,” he said.

In Iowa City, IAC laid off 170 people in 2008 and 80 in 2009 because of a reduction in demand from Chrysler, the plant’s biggest customer. Automakers went from 17 million vehicles annually to 11 million in a two-year period, Mr. Ladd said.

The 364,000-square-foot Iowa City facility was featured last year on for its vertical integration manufacturing capabilities, which company executives said allowed the company to take on new products and customers.