1,300 Layoffs for Northeast Philly’s Cardone Industries

The auto parts re-manufacturer is moving a division to Mexico, but vows that the company itself is staying put.

Every Thursday, get the latest dispatches from Philly’s business and innovation community delivered right to your inbox.

Cardone Industries plans to lay off more than 1,300 workers in Philadelphia. Cardone is an auto parts re-manufacturer, meaning it re-engineers parts for cars and trucks to fix problems that may have existed previously, or to get them to work with different makes or models.

The company is moving its brakes division to Mexico, meaning jobs will be eliminated at the company’s facilities at 5501 Whitaker Avenue and 5670 Rising Sun Avenue, both in lower Northeast Philadelphia.

The layoffs will begin in May when the company will terminate 11 employees at the Whitaker Street location and 31 at the Rising Sun facility. After that, 1,324 job terminations will occur on a monthly basis until 2018. There will likely be 20-30 layoffs per month, according to company spokesperson Kevin Feeley (who serves as president of Bellevue Communications Group.)

Currently, the company employs approximately 2,500 people in Philadelphia but the workforce will be cut down to 1,000 after the layoffs are complete, assuming there isn’t growth in other areas of the business.

The jobs will move to a facility in Matamoros, Mexico, just across the boarder from Brownsville, Texas. It will allow the company to keep labor costs down amid serious cost pressures, said Feeley.

“Competitors are outsourcing jobs to China, India and Mexico,” he said. “In order to be competitive, you have to pay the same level of wages.”

The action was announced to employees last week and the company sent a WARN notice to the Pennsylvania Dept. of Labor & Industry on January 14th.

Feeley said that it’s important to note that Cardone isn’t going anywhere.

“Cardone is headquartered in Philadelphia and will always be headquartered in Philadelphia,” said Feeley. “It’s the nerve center of the company’s operations.”

Cardone has invested $20 million in its Philadelphia operations over the last three to four years — much of which went into innovation, because cars are increasingly becoming more and more high-tech, said Feeley. There are no concrete hiring plans just yet, but the company is expecting to hire “several hundred” people in its electronics division over the next few years, he said.

“You’re really seeing a company that, frankly, is positioning itself for the long-term,” said Feeley. He went on to say that the company is “investing in electronics and innovation areas with the expectation that they will grow.”

The company is offering laid-off workers job-training programs, severance pay and helping them identify alternative opportunities inside or outside the company, said Feeley.

“There will be some opportunities over next few years for some employees to find jobs in other Cardone divisions,” he said. “We’re committed to try to find ways to help them get trained and get them alternative employment.”

It’s not the first time that Northeast Philadelphia has suffered a high volume of layoffs by a company that moved operations to Mexico. Mondolez International closed its Northeast Philadelphia facility (which was the old Nabisco plant) last year, leaving approximately 300 people out of work. Mondolez shipped those jobs to Monterrey Mexico.

Like what you’re reading? Stay in touch with BizPhilly — here’s how: