Calsonic North America Inc. is shutting down in Irvine after more than four decades of manufacturing in the county.
The maker of tubes and hoses for auto air conditioners is cutting about 250 jobs locally.
“We can’t afford to keep the business up,” said Bob Masteller, a Calsonic spokesman.
Calsonic is part of Japan’s Calsonic Kansei Corp. with its U.S. headquarters in Tennessee. The company is 40% owned by Nissan Motor Co.
A struggling auto market and higher shipping costs proved to be too much for Calsonic to compete with companies overseas, Masteller said.
“The Irvine operation isn’t part of our core business,” he said. “It made no sense to keep it.”
Calsonic plans to keep together the rest of its business, which makes a number of auto parts including exhaust systems and heaters at more than 50 plants around the world.
In North America, Calsonic runs about 10 facilities, including in Michigan, Tennessee and Mexico.
U.S. sales were about $1.1 billion last year. The Irvine operation brought in about $60 million, according to Masteller.
Calsonic tried selling the Irvine business but couldn’t find a buyer, according to Masteller.
“It’s just a sad situation we’re in,” he said.
Japan’s Yokohama Rubber Co., which has its U.S. headquarters in Fullerton, is one of the companies that could end up taking some of Calsonic’s business when the Irvine operation shuts down, according to Tod Farmer, director of plant operations.
Calsonic products mostly are sold to Nissan. It does some business with General Motors Corp. and Honda Motor Co.
The closing will happen in stages, with one round of layoffs to be completed by the end of October and a final round by the end of February.
Most of the jobs at the Irvine plant are in assembly and engineering. Calsonic said it would give severance pay and help workers find new jobs.
Calsonic began manufacturing in Irvine in the late 1970s with air conditioning kits for Nissan cars from Japan.
It got out of the business by the end of the 1980s when Japanese companies began to make their cars with air conditioning in the U.S.
The company then began to make the hoses and tubes for the air-conditioning kits that were sold to the factories, according to Farmer.
Staying in OC
Every year Calsonic would evaluate moving the business from Irvine to save on costs, Farmer said.
But despite California’s higher labor costs and government regulation, it stayed.
“It’s been a 20-year pressure,” he said. “We weren’t surprised over the news, but we’re disappointed.”
Farmer said he plans to stay in Orange County and look for other work in manufacturing or possibly something else.
A few of the Irvine workers are likely to move to one of Calsonic’s other locations, he said.
“They have talent and experience the company doesn’t want to lose,” Farmer said.
Most of the workers at the plant are involved with taking bulk aluminum, cutting and bending it into tubes, then placing brackets around them.
A considerable part of the work is automated, Farmer said.
Other jobs at the plant are for support staff, which involves buyers, planners, logistics and supervisory positions.
“Most of us love Orange County,” Farmer said. “No one really wants to leave.”
