April 6, 2009

EXCLUSIVE

KTH-Leesburg Products to offer 'separation packages'

By Scott Wright

LEESBURG — After Honda announced production cuts at its automotive plants in North America last week, it was only a matter of time until dedicated parts suppliers were forced to reduce their own workforces.

Unfortunately, the KTH plant in Leesburg has only one customer.

On March 31, Honda Motor Co. Ltd. announced it was cutting production in North America by 62,000 vehicles beginning in May. The company will also offer early retirement incentives and buyouts to “most of its 32,400 workers in the United States and Canada,” according to CNN.

In a one-page statement dated April 2, KTH-Leesburg Products (KLP) management said employees were informed the day before that “due to continued declining automotive sales, the company must adjust current employment levels to match sales” to the Honda plant in Lincoln.

KLP spokesman Gene Cleveland told The Post that the company is not laying off any of its employees, referred to as “associates”. Rather, he explained, the company is offering a “separation package” to anyone willing to accept it.

“This means the company is not deciding who leaves and who doesn't,” Cleveland said. “The associates choose to take the package or not.”

The statement from KLP did not provide details of the package, indicating only that it would be provided to “all interested associates as a means to meet the employment level needs.” The package was described as offering “financial assistance, including medical insurance premiums and educational assistance expenses.”

Cleveland confirmed that KLP hopes 50-60 associates will take the offer. However, he declined to offer many specifics.

“It is considered a matter between the company and the associates,” he said.
Cleveland said the company will offer “checks for a certain amount,” along with the offer of reimbursement for college classes taken at Gadsden State. KLP will also pick up some medical expenses.

“That includes payment by the company of the medical insurance premiums for associates who choose to take the separation package for a period of time,” he said.

The KLP statement explained that associates who accept the package will be considered for re-employment “as manufacturing needs increase.” It also said the offer is the first in company history.

“Under normal conditions we produce around 1,300 frame components per day,” Cleveland said. “As we have shared with our associates since February, the production numbers are falling to the rate of 750-900 per day, all models combined.”

The plant in Leesburg, which opened in 2000, provides stamped and welded steel parts for Honda's Odyssey, Pilot and Ridgeline models. After the move to reduce its workforce, KLP will still employ nearly 300 workers from Cherokee and surrounding counties.