Japanese auto parts maker Denso Corp. said Thursday it will move its Long Beach manufacturing operation to Mexico next year and fire 225 local workers to cut costs.
The affected facility, known as Denso Sales California Inc., makes tubes and hoses for vehicle air conditioners and builds portable industrial air conditioners. The planned cuts represent 2% of the company's North American work force, according to spokesman Mark Jonas, who said the company is under pressure from customers to slash costs.
Denso supplies auto parts to every major auto maker. Its principal customers in North America are the Big Three auto makers and Japanese transplants. Its majority shareholder is Toyota Motor Corp.
"We have been faced with some fairly severe requirements . . . to reduce costs as much as 30% over the next few years," Jonas said. "Our profit margins here are fairly low, so we needed to look at alternative locations."
Denso will shift the manufacturing of its air-conditioning products to Frontera, Mexico, where it is building a new facility projected to employ 400 workers. Jonas said the layoffs are expected to occur next April but that the company will retain 225 sales and distribution workers at its Long Beach facility. He said fired workers will be given outplacement assistance as well as three weeks' severance pay for each year of service. He said the average Long Beach manufacturing employee has been on the job for 10 years.
Denso is based in Tokyo and employs 85,000 worldwide. Southfield, Mich., is its headquarters in North America, where it employs 13,000 people at 21 locations.