(December 17, 2005) — Delphi Corp.'s woes are affecting many area manufacturers. One, Viking Polymer Solutions in Albion, Orleans County, laid off most of its workers Friday and is closing.

Andrea Dames, an Albion resident, was an hourly worker at Viking for 15 years.

"Our whole problem stemmed from Delphi," Dames said.

As a supplier to the world's largest auto parts manufacturer, Viking's bottom line was heavily dependent on Delphi's orders. When that contract expired, Viking's Albion plant could no longer afford to stay open. Dames said about 70 people worked there.

Viking's management would not comment.

Small manufacturers across the country are hurting as the Big Three U.S. automakers and their largest suppliers cut back. Many in the Rochester and Buffalo area rely on contracts with Delphi's Rochester and Lockport plants, and Delphi, which filed bankruptcy in October, has not said how the area plants would fare as it finds a way to cut costs.

"Definitely, how can it not (have an effect)?" asked Kevin Kelley, executive director of the Rochester Tooling & Machining Association trade group. "I'd say it has had a moderate impact at the present time, as in not drastic."

Some suppliers saw trouble coming as they scrutinized Delphi's high-cost business model. At the same time, Delphi increasingly shifted work from the United States to cost-competitive countries, making work for local companies harder to get, some suppliers say.

One union official says those trends are what caused Viking's problems.

"I am sure it's from Delphi trying to find lower-cost suppliers before the bankruptcy," said Frank Andrews, a worker at Delphi's Lockport plant and president of UAW Amalgamated Local 686, the union that oversees Viking's workers.

Delphi says it continues to try to handle supplier issues as it crafts a Chapter 11 reorganization plan.

"It would be hard for us if we didn't have these suppliers," said Delphi spokesman Lindsey Williams.

Indeed, some suppliers say business with Delphi continues.

"Everything is going very, very well. We keep delivering the product to them. It's really normal practice for Chapter 11," said JJ Liao, president of Macauto USA Corp., a Taiwan-based company heavily dependent on Delphi's business.

But others say the bankruptcy complicates their contracts. They say that Delphi owes them money, and that money is now tied up in the bankruptcy proceedings.

The latest plan filed with the court calls for Delphi to pay up to 75 percent of what it owes suppliers.

Delphi owes Precision Grinding and Manufacturing $17,000, said Vice President Todd Hockenberger.

"These things happen; you gotta roll with the punches. Are we concerned we're going to get the money? No. Are we desperate? No. Yeah, you're not going to like it, but it's not going to hurt me," said Hockenberger.

Since the bankruptcy, Precision has continued to receive requests for quotes.

"You're a little more cautious, but at this point I haven't gotten an order yet," said Hockenberger, whose company provides engineering samples to Delphi.

Delphi makes up roughly 20 percent of business at Liberty Precision Industries in Henrietta, said Chief Executive and President Douglas Woods.

"There is a five-figure amount of money held up in the Chapter 11 filing. We're uncertain as to what will happen with that," he said.

Plus, "there's a secondary impact in that we're supplying equipment to other tier suppliers that work for Delphi," Woods said.

"At some point, we have to get in line with everyone else and go through the formal process to get our claims heard."

In response to changing times, suppliers have diversified their products and customer base.

"There is constant pressure on suppliers to (big automakers) to further reduce prices and margins," said Rick Donofrio, who recently retired as controller of Lexington Machining. "Many suppliers are themselves on the verge of financial collapse, and others are trying to replace automotive business with non-automotive business."

Ron Ricotta, CEO and president of Century Mold, said he's been cautious about Delphi over the past few years.

"We were very cautious taking new business in the last few years because of the financial health of Delphi," Ricotta said.

Nevertheless, Ricotta also echoes the sentiments of suppliers who are optimistic about Delphi's future.

"We are trying to look at the silver lining," he said.

"If Delphi had to do this, which it appeared they did, we hope the end result is a healthy Delphi that should create many opportunities for a company like us."