Auto industry hits closer to home

[jillithian]

from St. Cloud Times

Grede will cut an additional 60 employees

By Britt Johnsen • bljohnsen@stcloudtimes.com • December 11, 2008
Grede Foundries said Wednesday it is laying off more than 60 workers from its roster of about 300, the fourth round of layoffs this year for the St. Cloud auto-parts maker.

Cuts will affect positions across the plant, said John Haas, vice president of operations. The company has suffered from a 30 percent to 40 percent drop in orders in the last six months. Its biggest customers — Chrysler, GM and Daimler, which account for 75 percent of Grede Foundries’ business — are part of the ailing auto industry that has pinned its hopes on a federal bailout.

Haas also said the manufacturer will transition from running five eight-hour shifts to four 10-hour workdays. That should help the company save money on energy and improve the plant’s overall efficiency, he said.

He said he hopes the business will not have to do any more layoffs. The layoffs announced Wednesday were not permanent and they did not create severance packages for employees, Haas said.

If and when the economy turns around, he expects to bring back employees and the regular five-day workweek.

At the same time, he is realistic about the economy and how it has affected his business and industry.

“(People) just don’t trust the economy right now,” he said. “We’re caught up in that.”

Elsewhere in the country, President-elect Barack Obama defended the auto bailout as necessary given the threat a potential Big Three collapse could pose to an already-battered economy.

“As messy as it may be, I think there’s a sense of, ‘Let’s stabilize the patient,’ ” he said in an interview published in Wednesday’s editions of the Chicago Tribune and Los Angeles Times.

He called the auto industry’s plight — lackluster sales, choked credit and widespread economic turmoil — “the perfect storm.”

Haas said the economy “is what it is.” Everyone in his industry is struggling, he said.

“At some point in time, it’s survival of the fittest,” he said.

The Associated Press contributed to this report.

I don't work there and I don't know of anyone who works there, but losing those jobs is not going to help the struggling economy in town. And yet I still don't think the auto industry should get bailed out yet. They need budgets and plans on how the money will DIRECTLY help them.

People should watch the movie Who Killed The Electric Car?. It has some very interesting viewpoints - especially regarding the serviceability of electric vehicles and its effect on car companies' bottom lines.