Friday, July 9, 1999

Henderson Gleaner

By CHUCK STINNETT

Although Gibbs Die Casting Corp. has opened a plant on the Tex-Mex border and is considering buying another in Korea, the head of its parent company said the Henderson plant's future is secure.

"Our objective is not to take any business or transfer any jobs from the Henderson plant to any other plant," Robert Koch II, president and CEO of Evansville-based Koch Enterprises Inc., told Henderson Rotarians on Thursday. "No jobs will be eliminated" at the plant here, he said. Gibbs reportedly employs 1,250 people here; the family-owned company declines to publicly disclose the size of Gibbs' work force. "In fact, our plan is to grow jobs in the Henderson area," he said, noting that Gibbs has undergone numerous expansions in recent years here. But the overseas expansion of Gibbs is inevitable, according to Koch.

Gibbs, the world's largest producer of magnesium steering wheel components and a manufacturer of other die-cast auto parts, "has had calls from customers to be international," he said. Since two-thirds of the world's cars are built outside North America, "If you're really going to be in the automotive market, you need a place in Asia and you need a place in Europe. Our customers are leading us to this. They say, if you're going to be a supplier to us, you need to be able to supply all over the world."

"They first wanted us to put a plant in Mexico. But we got chicken. We decided we were more comfortable with Texas than Mexico," Koch said, citing concerns with "the stability of the (Mexican) economy and the way government operates in Mexico."

So Gibbs instead opened a plant and has begun production in the border town of Harlingen, Texas, producing parts for plants that General Motors and other customers operate in Mexico.

Now, Ford Motor Co. is urging Gibbs to expand to Korea. "Ford had this supplier that went bankrupt, and they invited us to buy it. I don't know if anything will actually happen, but we are deep in negotiations."

Turning back to Henderson matters, Koch (pronounced Cook) spoke well of educational institutions here. "The schools are doing a wonderful job with the high school and the vocational school, and at the community college we have some students," he said.

"What I'd like to see is a four-year degree program," ideally one that offered technical or engineering degrees in addition to liberal arts, said Koch, a cum laude graduate of Notre Dame. The job market, he said, "is very, very tight in this area, just as it is tight in the Midwest and most of the United States.

"Our turnover is normally quite low, around 5 percent. But in the last year, it has doubled to around 10 percent, which makes things difficult for us. We see a lot of churning, people changing jobs, and it's difficult to find employees with adequate skill levels."

Koch said he also is disturbed by the indifference of younger employees. "Young people seem unconcerned with their jobs," he said. "They have a 'I don't care' attitude. For the community and the company to move ahead, people need to be committed to perform."

Aside from needing employees with good communication, math, problem-solving and teamwork skills, Koch said his company wants people willing to travel and work in other cities or countries.

"They're hard to find in Henderson and the Midwest," according to Koch, who said his company needs to be able to move into distant markets before competitors do.

Meanwhile, Koch provided an overview of Koch Enterprises, a 126-year-old company. The firm was founded by his great-grandfather, George Koch, who left his family's winery in Germany to come to the U.S., and eventually Evansville, where he established the George Koch Tin Shop.

In 1903, his three sons renamed the business George Koch Sons Inc., a name that remained until the company became Koch Enterprises this year.

All shares in the company are held by descendents of George Koch, their spouses or their trusts.

Gibbs Die Casting "is by far the largest" of the companies Koch

Enterprises owns. Others include:

*George Koch Sons LLC, which designs, manufactures and installs industrial paint systems used to paint cars, appliances, furniture and practically every U.S.-made motorcycle.

*Koch Air, the nation's fourth biggest distributor of Carrier air conditioners.

*Brake Supply, which distributes brake parts for off-road equipment, such as mining equipment.

*Uniseal, which produces sealants used in cars.

It also owns 51 percent of Audubon Metals, a Henderson plant that produces aluminum alloy for die castings from aluminum scrap recovered from one million junk cars shredded here each year by its partner, David J. Joseph Co.

Koch Enterprises has experienced rapid growth under Robert Koch's guidance, with sales leaping from $30 million in 1975 to more than $500 million in 1998, making it one of the nation's 500 biggest privately held companies, according to Forbes magazine.