Kohler Building Big Fixtures Plant in Mexico : Manufacturing: The highly automated facility will be near Monterrey. It may cause friction during upcoming U.S. union contract talks.
Kohler Co., the giant plumbing fixtures manufacturer, has begun construction of a highly automated factory on 300 acres near Monterrey, Mexico, that could become one of the nation’s largest foreign-owned plants, or maquiladoras , in recent history.
Wisconsin-based Kohler, one of the world’s top manufacturers of ceramic toilet bowls, sinks, lavatories, bathtubs and urinals, declined to comment on its plans for the recently purchased site. However, a Kohler official contacted at the Monterrey site said construction had already begun on the first phase of a highly automated ceramic fixtures factory that is scheduled for completion by early 1991.
In total, Kohler’s land is large enough for at least 6 million square feet of industrial buildings, assuming about half the land is ultimately built upon, a relatively conservative development approach, observers said. That would be more than the 5 million square feet of factory space the company occupies at Kohler, the company-dominated town about 50 miles north of Milwaukee.
It was unclear Monday how many workers would be employed at the Monterrey facility and whether layoffs would result at Kohler’s Wisconsin plant as a result.
A Kohler source speculated that the company may be reluctant to talk because of its upcoming contract negotiations with the United Auto Workers union, which represents about half of the 6,500 workers at Kohler. Kohler posted sales last year in excess of $1.3 billion. The company has 14,500 employees worldwide.
Kohler has been the scene of bitter labor unrest. Workers once struck the plant for six years, in one of the longest strikes in U.S. history, which ended in the early 1960s when the UAW successfully organized the plant.
News of Kohler’s new maquiladora came as a surprise to Ron Platz, vice president of UAW Local 833 representing the Kohler employees. Platz expressed fears that the development could result in lost jobs or a reduction in hours worked by his rank and file.
“We had been hearing rumors for some time about them building (in Mexico) but there were no real hard facts,” Platz said, adding that his local will begin negotiations on a new labor contract in August. “If it affects our employees, we are definitely going to register a complaint with the company.”
A Kohler spokesman said the company experienced a “work stoppage” lasting a couple of weeks four years ago, the last time its UAW contract was renegotiated.
Tony Ramirez, vice president of Made in Mexico, a Chula Vista, Calif-based consultant who advises U.S. companies considering moving manufacturing operations to Mexico, said the Kohler deal ranks as “one of the major investments in Mexico from a U.S. point of view.”
Pointing out that Kohler has yet to detail its plans for the land, Ramirez said it could rival the size of Mexican plants operated by auto maker Chrysler Corp. and medical supply manufacturer Baxter International.
“It demonstrates a lot of confidence in what Mexico is trying to do” in attracting foreign investment, Ramirez said.
Kohler was founded in 1873 by John Kohler, an Austrian immigrant, and remains under family control. Kohler’s grandson, Herbert Kohler, is now president of the company, one of the largest closely held companies in the nation.
National Home Builders Assn. spokesman Jay Shackforth in Washington said Kohler ranks with American Standard and Delta Faucet Co. as among the world’s largest plumbing fixture manufacturers.
