Rockford, USA
'Singapore is a threat'
Hamilton Sundstrand is about to open a manufacturing centre in a place called Singapore. Bob Schaper. Rockford Register Star.
Feb 13, 2005

ROCKFORD -- For most people in Rockford, Singapore seems impossibly distant. The tiny island - 10,000 miles away and literally on the other side of the world -- is nothing more than an exotic land they once studied in school.

But to workers at Hamilton Sundstrand's Rockford facility, the country in Southeast Asia is much more than a dot on the map.

As the company prepares to open a 160,000-square-foot manufacturing centre near Singapore's Changi Airport, they see Singapore as a burgeoning threat to their jobs.

Jeff Bronson, president of United Auto Workers Local 592, which represents 675 workers at Sundstrand, said many members of the union are afraid production work in Rockford may be shifted to the new plant after it opens this fall.

"We're dealing with an international corporation that has no real ties with Rockford," Bronson said about Sundstrand. "They're going to do what they want to do."

Melissa Marsden, a spokeswoman for Sundstrand in Rockford, offered little insight into the matter.

"It's our policy to not comment on rumors or speculation," Marsden wrote in an e-mail. Hamilton Sundstrand continually reviews all aspects of our business for efficiencies that will increase our competitive edge."

The company broke ground on the Singapore factory last month, but would not divulge the cost of the building or equipment. Published reports vary wildly, placing the investment at between US$17-$55 million.

The new facility will make aerospace components such as gearboxes, generators and pumps, and will reportedly employ about 330 workers. The finished parts will be shipped back to the United States for aircraft installation.

Similar components are made in Rockford. Bronson said some of the Singapore-produced parts would go into the Boeing 787 Dreamliner (formerly the 7E7). Previously, Boeing announced that Sundstrand would supply $5 billion worth of components for the program.

"We already knew we weren't going to get a lot of the work for that in Rockford," Bronson said.

Already, about 240 American jobs are scheduled to be eliminated because of the new plant. In November, Sundstrand announced its Grand Junction, Colo., facility will close later this year, splitting the work between Singapore and external outsourcers.

Peg Hashem, a spokeswoman at Sundstrand's Windsor Locks, Conn., headquarters, said the company's increasing presence in Singapore was necessitated by the competitive nature of the aerospace manufacturing business.

Singapore's a low-cost plant
"Singapore is a lower-cost plant," she said Tuesday. "It's a very business-friendly environment. We are really in an industry now that insists that we produce things for them at the lowest possible costs. Sometimes that makes it necessary for us to make some difficult decisions."

Singapore, a city-state off the tip of the Malay Peninsula, is home to a US$4.4 billion aerospace business. Employing about 11,000 workers, the sector has grown at an average of 11 percent annually for the past 10 years.

Including a repair and overhaul facility jointly owned with Singapore Airlines, the new plant will be Sundstrand's third on the island. The company's other facility is a 170,000-square-foot factory with 540 employees.

Part of what worries Bronson is what he described as the lack of investment in Sundstrand's local manufacturing equipment.

"Obviously, the more money they put in capital improvements the better our job security is," he said. "It seems that where the money is going in the last couple of years has been in the high-tech test facilities and engineering-based operations."

Bronson said there was nothing "meaningful" in the union's contract that would prevent work from being transferred to other Hamilton Sundstrand facilities.

"We've tried to get language (to that effect) over the years, but they're adamant about not making those kind of agreements," he said.

Although Local 592 members make an average of $22 an hour, Bronson said Sundstrand's operations in Rockford have always been profitable.

"What we're really talking about now is what is an acceptable amount of profit," he said.
"Do you send work to places where you pay people half in the interest of squeezing a few more dollars? I say, 'No.' Management has a different opinion."

The average monthly pay of a Singapore worker was US$1,949 in 2003, according to that government's figures.

As part of a wider reorganisation, 275 local Sundstrand workers will be laid off beginning Feb 21, including about 160 to 180 union members. Rockford's repairs and overhaul operation, employing 160, will move to Miramar, Fla. Electronics manufacturing will be split between Phoenix and Puerto Rico, eliminating 115 jobs.

Marsden said in January that all workers at repair and overhaul would be terminated by June 1, while the electronics manufacturing operation would be shuttered by the end of 2005.
Rockford Register Star.