After 79 years as a “significant player” in the automotive industry and others, Michigan Spring & Stamping is shutting down its Muskegon operations and laying off 116 employees.

The company is among a growing number of businesses planning to shut down or lay off employees this year in a state where 45,000 lost their jobs in 2024.The Muskegon layoffs are among 1,830 scheduled for 14 large companies in the next two months, impacting workers in nine counties.

Michigan’s unemployment increased by two tenths to 5% in December, marking the ninth straight month of increasing unemployment in the Great Lakes State.

Go Ad-Free, Get Content, Go Premium Today - $1 Trial

A total of 252,000 Michiganders were unemployed in December, which translates to 45,000 more than the 207,000 unemployed in December 2023.

“Michigan’s number of unemployed people increased by 21.7 percent over the year, a gain 12.7 percentage points larger than the growth in unemployed persons seen nationally (+9.0 percent),” according to the Department of Technology, Management & Budget.

Many of those job losses came from the state’s critical automotive industry, despite billions in business incentive deals inked by the Gov. Gretchen Whitmer administration to force a transition to electric vehicles.

Michigan Spring & Stamping filed a WARN notice with the Michigan Department of Labor and Economic Opportunity last month detailing plans to terminate all 116 of its employees at its Wickham Drive location in Muskegon, although General Motors intervened to potentially postpone the closure until June, WZZM reports.

Go Ad-Free, Get Content, Go Premium Today - $1 Trial

General Manager Gene Kohut, the company’s fiduciary, told Crain’s Business Grand Rapids the insolvency proceeding filed in Muskegon County Circuit Court means the automaker will finance remaining operations to prevent production disruptions while “winding the company down.”

“This is a very unique situation in the sense that a lot of times, companies just send out a (WARN) notice. And certainly, if it’s under the limits under the federal and state guidelines in terms of the number of employees, they just simply close the doors and say, that’s it — you’re terminated,” Kohut said. “This is not the case here.”

Michigan Spring & Stamping makes compression, extension and torsion springs auto manufacturers use for powertrain and transmission applications, and also manufactures engineered metal components for medical, recreation and industrial uses.

The company was founded in 1946 and remained a “a significant player for quite a long period of time,” Kohut told Crain’s.

“They were a relevant supplier not just simply for GM, but other OEMs and their suppliers,” he said.

Michigan Spring & Stamping was purchased by the West Michigan industrial holding company Hines Corp. in 2008, and was sold to the German technology company Kern-Liebers in 2019, MLive reports.

Kern-Liebers attempted to sell Michigan Spring & Stamping but could not find a buyer, and the deal with GM will allow the company to pay off creditors to avoid bankruptcy, Kohut said.

While employees were offered retention bonuses to work through the wind down, the deal with GM provides suppliers and creditors “ample time in order to re-source the current production to other suppliers that are able to handle the load that’s necessary,” Kohut told Crain’s.

“It’s pretty significant involvement to continue (operations) to allow GM and other suppliers to re-source who the current suppliers are,” he said. “So that obviously takes money, and it takes time. So in order to do that, GM has agreed to fund that process.”

Kohut would not divulge how much GM spent to keep the company alive over the coming months, but said was “significant.”