Enquirer Herald

Hella to close York plant, lay off 387 workers

Nearly 400 York County workers will be out of a job next year when a German-owned auto parts plant ends production at its York location.

Hella Lighting Corp. officials cited difficult market conditions and “insufficient business” in the U.S. automotive industry for its decision to close the factory at York Industrial Park in May 2010. Hella will shift all U.S. manufacturing to Mexico and Eastern Europe, according to an announcement from the company.

"It's a sad day for us, but our folks are resilient,” said Steve Ballenger, managing director for the York plant. “We'll make the best of it and move on.”

Ballenger declined further comment.

Prior to announcing the closure to employees on Friday, three top Hella executives met with York Mayor Eddie Lee, York Electric Cooperative President and CEO Paul Basha and other area leaders to clue them in on the move.

“The tremors that are racing through the American automotive industry have now been felt in York,” Lee said. “My major concern is for the folks losing their jobs."

Basha said he shares that concern.

“They are a big part of our industrial park,” Basha said. “But what we're really worried about are the people losing their jobs, especially with everything else going on in this economy.”

Hella is a major customer of York Electric, especially during the evening off-peak hours, which helps keep the co-op's rates low for residential users, Basha said.

“That's part of the reason we got into economic development with the Industrial Park,” he said.

Basha said the co-op doesn't plan a rate hike, though, and said the he will work with the York County Economic Development Board and the plant owner to find a new tenant as soon as possible after Hella shuts down.

“It's a big building, and they've made at least one addition,” Basha said. “It's a nice, modern facility, high ceilings, very clean; they do a lot of assembly line and high tech machinery work in there.”

Based in Lippstadt, Germany, Hella has operated in York for about 10 years. The company makes vehicle headlamps for car manufacturers across the U.S., including General Motors and Chrysler.

Hella nearly doubled its size three years ago with a $13 million expansion to its York plant to keep up with the demand for automotive headlights, company officials said.

For several years, Hella was one of York County's top employers. It was the 12th largest employer in York County in 2006 and 14th in 2008, according to Herald archives.

But Hella was not immune to the economic downturn. In 2008, the company had 682 employees. Friday's announcement said the company currently employs 387.

Lee said officials told him the company laid off hundreds of employees prior to opting to close the plant altogether.

“I was hoping they were making an announcement about hiring more people, but it turned to sour grapes real soon,” said state Rep. Herb Kirsh, D-Clover, who also sat in on Friday's meeting. “I wasn't prepared for that. It was a shock.”

But a Winthrop University professor says it shouldn't be a surprise.

Bob Stonebraker, an economics professor, said given the decline in auto sales, it's reasonable to expect suppliers will close plants and cut back on capacity. But it's not a problem unique to York County – or even the United States, he said.

“People aren't buying many cars. And if people aren't buying many cars, manufacturers are not ordering many headlights,” Stonebraker said.

Because the Hella plant is one of the area's top employers, its closing will impact the local economy, said Stonebraker, who teaches classes about management and unemployment.

“That's a lot of people who won't be going out to eat, or buying new carpet or going on vacations,” Stonebraker explained. “There will be a ripple effect.”

Kirsh said Hella officials plan to work with employees to find jobs for them before the plant closes. Additionally, Lee said he spoke with York Technical College President Dr. Greg Rutherford about the programs available at the school to help Hella employees hone additional skills to find a new job.

- Herald intern Shatesha Scales contributed