Ionia optimistic Meridian closing won't impact city

Nate Caminata

Ionia city officials remain optimistic despite the pending close of the Meridian Automotive plant in Grand Rapids.

Although Meridian has yet to make an official announcement, the Kentwood plant is expected to close its doors in the next three to six months, according to the Grand Rapids Press. Just less than 100 employees will be affected by the closing. Meridian has seven plants in Michigan, including two in Ionia.

Whether or not the move will impact Ionia remains to be seen, but Ionia City Manager Jason Eppel was confident that the company -- which employs between 750 and 800 workers between its two facilities -- will keep its city operations intact.

“I believe we're solid,” Eppel said. “That is due to a few things. First, it has to do with the quality of workforce they employ here.”

Eppel added that the city has made concessions to make Ionia “more attractive.” One such move was the city's abatement to Meridian allowing Meridian automotive to purchase personal property and/or equipment that is 100-percent except from property tax over a 12-year period.

Eppler estimated that Meridian counts towards nearly 20 percent of the city's taxable value, or about $25.5 million. Besides the Ionia prison system, it also serves as the city's second largest source of income. The company's importance wasn't downplayed by Eppler, either, who compared the potential loss of Meridian to the city of Greenville's devastating loss of Electrolux.

“It's a significant community impact,” Eppler said.

It is because of that reliance that city officials have made continuous adjustments, including interminable dialogue with Meridian, to strengthen the relationship between each side.

One such benefit to Meridian has been the ability to plate plastics. The introduction of the company's new plastic plating line will be announced with a ribbon cutting ceremony on July 21 at its 800,000 square foot facility. It is a process that the company initiated in Ionia, and something they were unable to do previously.

“One thing I've learned in working with them is that being an automotive supplier is a tough business,” said Eppler. “Anything we can do to make adjustments will help us firm their long-term survivability here.”

One drawback to Ionia, and Grand Rapids in general, is its proximity to the Detroit market. Because Meridian is a supplier of Ford Motor Company, a cost-effective solution is to keep transportation expenses to a minimum. But Ionia's willingness to work with Meridian, Eppler said, is an effective counterweight.

“The quality of the workforce, and working closely together to make sure Meridian can make parts at a cost-effective rate, and how we've worked towards diversifying the plant, those three things make Meridian's Ionia plant more attractive than some others,” he said. “In essence, we're competing with some of the other locations in the state where Meridian has plants.”

That includes the Grand Rapids market, but Eppler was hopeful that a piece of the workforce at the Kentwood plan would be transferred to Ionia.

“From a municipal perspective, that brings in additional employees, additional local business for merchants, and for us, additional income tax revenues,” he said, adding “(but) certainly, Meridian being a company emerging from bankruptcy, they may just look at reducing their workforce.”

Meridian, which partially spawned from Ionia in a deal that included Ionia-based American Bumper & Manufacturing in 1997, emerged from Chapter 11 status in January. Chapter 11 is a reshuffling of assets within the U.S. bankruptcy code, providing protection to a company from creditors as it attempts to reorganize. Since that time, Meridian secured $167 million in funding with plans to acquire a plant in Sandusky, Ohio.

Despite the Grand Rapids closing, and fledgling financial status of Meridian Automotive, Eppler remained reassuring.

“We spent a considerable amount of time with them as they went into bankruptcy, and came out of bankruptcy, along with getting a better understanding of how that business operation impacts the city and the area,” he said.

“We have worked hard to try and meet their needs. That optimism has to be within the framework of the fact that the automotive industry is tough, with the understanding that we're a fair distance from the market itself.”

Messages left to Meridian spokesman Mark Decker and the company's local human resources manager, Ray Sacks, were not immediately returned.