Brake Parts acquistion means immediate job cuts but potential longer-term growth

About two dozen jobs will be eliminated from the Brake Parts Inc., facility in McHenry as part of the company's acquisition in late July by Cleveland-based First Brands Group, a spokesman said.

More workers may be heading there in the near future, however, and local business leaders remain hopeful other manufacturers will increase their presence in the area as a response to effects of the COVID-19 pandemic.

The jobs disappearing from Brake Parts, which had employed more than 400 before the First Brands purchase, include human resource and finance positions, said Ed Patru, a spokesman for Brake Parts Inc.

First Brands plans to increase its McHenry workforce to at least pre-acquisition levels by the end of the year, and it might even add enough jobs to exceed the facility's employee numbers before the deal, Patru said.

"We’re committed to showing compassion and respect to our employees through severance packages that include extended pay and health care and incentives to support our transitioning workers," Patru said. "This decision to realign operations was not arrived at lightly, but it was made now in order to strengthen [Brake Parts'] position as a market leader amid unprecedented economic disruption and uncertainty."

First Brands plans to add new work to the facility, and as the workload grows, so will the workforce, Patru said.

"This facility will serve a key function in our operations as we continue to broaden our North American manufacturing footprint and expand supply chains in the U.S.," he said.

Other businesses are also beefing up manufacturing and distribution assets on this continent in reaction to the COVID-19 outbreak, which broke supply chains across industries.

"Because of the pandemic, we have absolutely seen some supply chain diversification and efforts to reshore," said Illinois Manufacturers' Association Vice President of External Affairs Gordy Hulten. "We are grateful for the work being done by Illinois manufacturers and the new-found awareness of policymakers of the need for wise policy making regarding domestic manufacturing."

Not all businesses targeting U.S. markets will be keen to relocate or add production in the country, however, said McHenry County Economic Development Corporation Executive Director Jim McConoughey. He referred to adding production in the U.S. as "onshoring," and said producers dependent on American consumers are most likely to consider it.

"We will see some onshoring that will occur because of lots of issues relating to safety," he said. "I think almost all medical device stuff will move on shore. I don't see a grand reshuffling of global companies doing global things. The idea there is not to put your eggs in one basket in America."

It is a possibility the desire of manufacturers to add reliability to the North American supply chain could bring more jobs to McHenry County.

"It's our hope we're going to see that," McConoughey said. "The challenge in any manufacturing community is they have to be very opportunistic in the way they expand in the current [economic] situation."

Investments made during a recession must be justified by signs that consumer demand is returning and sustainable, he said.

"I think for the companies that manufacture to the suppliers in America and to the consumers in America, that will be a big option for us," McConoughey said.