Tenneco moving Harley work to Lincoln, Seward
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BY MATT OLBERDING and DICK PIERSOL / Lincoln Journal Star
Tenneco Automotive Inc. said Friday it intends to add 90 jobs in Seward and Lincoln over the next 15 months as it moves muffler and exhaust system manufacturing for Harley-Davidson motorcycles from a union plant in Salinas, Calif., to the non-union plants in Nebraska.
The move likely will add 50 jobs in Seward and 40 in Lincoln, said Michael Brown, human resources manager at the company's Seward plant. The Salinas plant, expected to be closed, employs 190 people.
About 400 people now work at the Seward plant, making exhaust systems for vehicles like the Dodge Viper, Chevrolet Malibu and Dodge Ram trucks. Another 49 people make Harley motorcycle exhaust systems at Lincoln Plating's campus, 600 W. E St.
The company said it also intends to move engineering and prototyping to its sites in Grass Lake, Mich., and Seward.
Tenneco Automotive is a $4.2 billion international manufacturing company with headquarters in Lake Forest, Ill., and approximately 18,800 employees worldwide.
Tenneco Automotive acquired Gabilan Manufacturing Inc., which owned the Salinas plant and its satellite operation at Lincoln Plating, in February.
Gabilan opened the Lincoln site in 2000. Gabilan was the exclusive supplier of exhaust systems for Harley-Davidson. Lincoln Plating does all the chrome plating for Harley-Davidson plants in Kansas City, Mo., and York, Pa.
The proposed move is designed to improve efficiency and reduce costs by moving operations closer to Harley-Davidson and filling existing manufacturing capacity, Tenneco Automotive said.
Brown said the moving of production and closing of the Salinas plant made sense because of the proximity of Tenneco Automotive's Seward and Lincoln plants to Lincoln Plating, and the Nebraska operations' proximity to Harley's Kansas City plant.
The owners of Gabilan, which had a 50-year relationship with Harley, wanted to retire, Brown said.
"It made good business sense to move," he said.
Two other former Gabilan operations, in Milwaukee and Emigsville, Pa., will not be affected.
Tenneco Automotive Chairman and CEO Mark Frissora said that an evaluation of operations showed, "significant efficiencies could be achieved by moving production to our Nebraska facilities" and consolidating engineering.
Adjustments between the Lincoln and Seward work sites will continue through the 15 months of adjustment, said Brown.
"Some processes in Seward will be moving to Lincoln," he said. "That whole footprint's going to have to be analyzed now."
Tenneco Automotive would not disclose pay rates at the California plant.
Average wage at the Seward plant now is $15.92 an hour, plus benefits, according to Brown.
"It's very competitive with companies like Molex and Kawasaki," he said. Those two manufacturers operate in Lincoln.
Steve Bauer, spokesman for Lincoln Plating, said that since his company was already chrome-plating all the Harley exhaust systems, the change in manufacturing sites won't mean more work for Lincoln Plating, but should strengthen the relationship with Tenneco.
For Tenneco Automotive in the United States, it's a new business. "Harley approached us to see if we'd be interested in buying Gabilan," Brown said. "The Harley exhaust systems will be a new program. We have some experience with motorcycle systems over in Europe, so we have little experience, but this will be new to us."
He said the company has worked directly with Nebraska's Workforce Development department, also known as the Department of Labor, but has no agreement with the state to get tax incentives for expansion.
Employees at the California plant were represented by the operating engineers union, according to a Tenneco Automotive spokeswoman. Officials with that union officials could not be reached for comment.
"We regret the impact of this proposed move on the employees in Salinas," said Frissora, the Tenneco Automotive chairman, in a prepared statement. "We are committed to working with them and their union to make the transition as smooth as possible."
Brown said Salinas employees would be given the opportunity to relocate, but details have not been worked out.
"This is just outstanding news for the whole region," said Wendy Birdsall, interim president of the Lincoln Chamber of Commerce. "We always look forward to any announcements that talk about growth. We look forward to working with them during the transition."
Garold Leggott, an executive vice president at Jones Bank who is on the board of the Seward Area Development Corporation, said he had not heard about the announcement but he was pleased Seward would be getting more jobs.
"I think it will be wonderful for our community," Leggott said.
He said Tenneco has been in Seward for 25-30 years and he said they've "been a great employer in our area."
Reach Matt Olberding at 473-2647 or molberding@journalstar.com. Reach Dick Piersol at 473-7241 or dpiersol@journalstar.com.
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