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Tuesday, Feb 7, 2023

Valley Firm Leaving L.A.

When Superior Industries International Inc. announced this month it was leaving the San Fernando Valley for Michigan, local economic development officials were caught off guard. The Van Nuys manufacturer of aluminum wheels intentionally did not disclose its plans to relocate to Southfield, where it could be closer to the large Detroit automakers that account for 70 percent of its business. Chief Financial Officer Kerry Shiba acknowledged Michigan was “aggressive” in wooing the company and gave Superior $900,000 for relocation expenses. But he also said the move was a strategic imperative and the company didn’t want to play one state against another. “We did not do any outreach to establish those discussions,” he said. “From a business perspective it makes sense for a Tier One supplier to be in that area. Being able to see customers at a high level is a really different environment.” The move comes amidst a bruising proxy fight between Superior management and its largest institutional shareholder Gamco Asset Management Inc., a New York fund run by billionaire Mario Gabelli. Gamco owns 7.8 percent of Superior’s stock, and Gabelli has pushed the company to improve its financial performance. The move to Michigan follows the appointment of new Chief Executive Don Stebbins, who took the helm in May 2014 amid the ongoing proxy battles, and who lives in Michigan. However, Shiba said Stebbins’s residence was not a factor in the decision. The relocation is expected to result in the loss of about 50 local managerial and administrative positions. The move of the publicly traded company also comes at a sensitive time for the Los Angeles business community, which is in the midst of a debate over a proposed hike in the minimum wage and how to make the area more business friendly. Stuart Waldman, president of the Valley Industry & Commerce Association, a Sherman Oaks business advocacy group, acknowledged he had not been aware of Superior’s move. But he said the company’s departure highlights the need for Los Angeles and the state to be more competitive. “We make things so hard through minimum wage orders or worker’s compensation costs or regulations that make it easy for a company to up and take jobs to another state,” he said. Superior’s departure brings to an end the presence of a company that dates back to when Los Angeles was a major hub of the auto industry. Ford Motor Co., Chrysler and General Motors Co. all had manufacturing plants in the region. Superior was founded in 1957 by Louis Borick as an auto accessories dealer and grew into one of the largest aluminum wheel manufacturers during the 1970s. However, the company has been hit hard by cheaper imports from Asia. It also was hit hard by the recession, but rebounded after closing its last local plant in Van Nuys, as well as operations in Tennessee and Kansas, in favor of sending the work to Mexico where it could be done cheaper. The company earned nearly $31 million on sales of $821 million in 2012. However, income slid to $8.8 million on sales of $746 million last year. That forced Superior to keep trimming costs, closing an Arkansas plant last year while opening its fourth factory in the Mexican city of Chihuahua. It was that weakening financial performance that led Gabelli to try and get a slate of three members on the Superior board two years ago. The fight was renewed this year and at the May 5 annual meeting another Gabelli slate was up for election, but once again lost in the vote count. Shiba said Superior’s move will not be completed for at least three to four months. He expects that a minority of the 50 employees will decide to move to Michigan.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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