ZF Lemforder to close plant

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By Chris Sardelli

A company that has produced automotive suspension systems in Lancaster since 1999 will close its operations here within the next 13 months.

ZF Lemforder, located in the Lancaster Business Park, announced Wednesday its intention to consolidate with a ZF plant in Gainesville, Ga. The 90,000 square-foot plant will slow down production next year and plans to close completely by September 2010.

There are now 108 employees at the facility.  

The company will work with the employees on severance packages and possibly relocating

some of them to other ZF plants, said Frank Buscemi, spokesman for ZF Lemforder Corp., parent company for the Lancaster plant and a worldwide company that specializes in automotive driveline and chassis technology.

Buscemi cites the poor economy and decreased demand for vehicles and vehicle products as reasons for the consolidation.

“It’s the situation with the industry,” Buscemi said. “We’ve got to maximize where they’re manufacturing, and you can’t have buildings that are half empty.”

One of the reasons ZF Lemforder decided to close the Lancaster plant is because its Georgia facility has 100,000 square feet of empty floor space, which the company feels could accommodate a consolidation of the two plants, said Keith Tunnell, president of the Lancaster County Economic Development Corp.

The Gainesville location also produces a unique product, Tunnell said.

In a press release, John Duncan, president of the company’s off-road driveline technology and axle systems division, said the industry is facing significant challenges.

“This decision to close the Lancaster facility was a difficult one. However, we understand the severity of the situation within the vehicle industry, and it requires us to do everything we can to maximize our efficiency and optimize our industrial footprint,” Duncan said.

Tunnell said he attempted to find incentives that would help keep the plant in operation here.

“We asked if there was anything we can do. They said no, that the decision had already been made due to economic factors,” Tunnell said. “It was all internal. They said they made the decision for the long term.”

Tunnell said there will be no job impact on the county this year from the loss of the plant. That will save the county’s already high unemployment rate from increasing – at least until the new year.

The county’s jobless rate in June, the last month for which the state has figures,  was 19.1 percent. It was the seventh-highest unemployment rate in the state.

Due to the advance warning, Tunnell said his office has already begun marketing the building for new companies.

“They were kind enough to give us a head start,” Tunnell said. “If there’s any bright spot to this, it’s that they let us know early so we can market the building before job losses occur.”

This is not the first indication of trouble at the company.

In March, ZF Lemforder laid off 47 employees here.

Those employees were not laid off all at once, but were instead phased out over the course of two weeks. At the time, the plant had decided to consolidate its two shifts into one.

The company asked its Lancaster employees for volunteers to be laid off in return for severance packages. A majority of those who were laid off volunteered.

About ZF Lemforder

ZF has a worldwide workforce of more than 63,000 employees, with 125 locations in 26 countries.  

The corporation has plants that specialize in driveline technology for cars, commercial vehicles and construction equipment. It also develops car chassis, powertrain and suspension technology, and has divisions for marine and aviation systems.

Contact reporter Chris Sardelli  at csardelli@thelancasternews.com or at (803) 416-8416