Detroit Axle to close Ferndale warehouse, lay off 102 employees
Detroit Axle has announced it will close its warehouse in Ferndale, Michigan, citing disruptions in its automotive parts supply chain that have resulted from recent changes in U.S. import tariff policy.
A total of 102 employees will lose their jobs permanently as a result of the site closure on West Eight Mile Road, including shipping, box makers and drivers.
The details of the layoffs were related in a filed with the Michigan Department of Labor and Economic Opportunity for Axle of Detroit, doing business as Detroit Axle. The employee separations will occur on Aug. 25. None of the positions affected are union jobs, according to the notice.
The Worker Adjustment and Retraining Notification Act, also known as the WARN Act, requires companies going through mass layoffs and/or site closures to issue advance public notice to the state's labor department, should that step meet certain requirements for the size of the company or the number of people involved.
Detroit Axle, based in Michigan, is a family-run retailer and distributor of auto parts, selling both original-equipment-manufactured and aftermarket lines.
The company had filed a complaint in June with the U.S. Court of International Trade, seeking immediate intervention and providing explanations on how changes in tariff policy had a direct impact on a specific line of its business operations.
"Through thirty-five years of hard work and ingenuity, and with the help of longstanding U.S. laws and policies promoting free trade, the company has transformed from a local Rust Belt supplier to a national Internet-based dealer with hundreds of millions of dollars in annual sales," the complaint read. "But as a result of recent drastic and unlawful changes in trade policy, this American success story — and the jobs of its hundreds of U.S. employees in Michigan — could be wiped out in a matter of months."
The company related that it had relied on contracts with manufacturers in China to provide certain parts that were not made by any such companies in the United States.
"But Detroit Axle now faces an existential threat," the company said in June.
This statement was filed after a number of actual and threatened changes in import tariff policies were issued. Those changes included for goods valued less than $800.
The company said many of its competitors were not as heavily impacted because they sourced small-dollar parts from other countries or, for various reasons, were dealing with lower tariff rates. It is expected that customers "will not bear the increased prices, and Detroit Axle cannot absorb them."
The impact is that operations in Mexico have reached "a near standstill," and can not easily be shifted to Michigan for logistical reasons such as capital investments and long-term contracts.
So as the inventory already in Michigan winds down, the company said in the complaint, it "will be forced to close the doors of its Michigan facilities and lay off hundreds of employees."
"Even if the company could eventually find new suppliers outside of China and restart the business, it likely would never achieve its former level of success. Even a short period of dormancy likely would cost Detroit Axle its top-seller status on critical e-marketplaces like Amazon and eBay," the complaint said.
The company started noticing changes in 2018 with tariffs in effect at that time, and decided to source some of its orders through a distribution facility in Mexico. This decision helped minimize the impact of tariffs aimed at Chinese imports, the company said.
And after routing some of its supply chain through the facility in Mexico, Detroit Axle was able to expand its Michigan workforce and business operations.
