Nearly 800 jobs shed through Sept. in Miss., figures show
We welcome you to JobBank USA and hope your job hunting experience
is a pleasant one. We hope you find our resources useful.
January 3, 2009
MILWAUKEE — More than half of the manufacturers that produce parts and tools for automakers and other industries have implemented layoffs or reduced work hours in December because of the declining economy, according to a survey from the Precision Metalforming Association, an Ohio-based trade group.
That's up from 42 percent in November and 18 percent a year ago.
"Business conditions for many metal-forming companies are extraordinarily challenging," said William Gaskin, president of the trade group, in a statement.
Kevin Logan, president of Mississippi Auto Manufacturers Association, estimated as many as 70 percent of auto manufacturers in the state had layoffs during December. Workers have been furloughed longer this year, he said, because Nissan extended its holiday shutdown for more than a week beyond last year's.
Nissan is expected to shut down an extra week in March, in addition to a planned shutdown during the summer, Logan said.
Through September, the state's auto suppliers shed nearly 800 jobs, including four announced closures, according to the Mississippi Department of Employment Security Web site.
"Suppliers to the automotive industry have been hit especially hard by production declines because of poor car sales in the fourth quarter, and the outlook for the first quarter of 2009 is only marginally improved," Gaskin said.
Logan said, at one point, 2008 had been expected to be a good year.
"Nissan had increased production," he said. "They went to three shifts. We had to go to three shifts. We were working overtime. Up until three months ago, it was looking good. And then the bottom fell out."
The economic slide has made consumers nervous, leading many to delay buying cars. Logan said others want to buy a car, "but can't get the money because their credit scores aren't what (the banks) need them to be."
Of the 157 companies surveyed by the Precision Metalforming Association, 63 percent said they expect business activity to decline during the next three months, while 31 percent predict it would remain unchanged and 6 percent forecast an improvement.
Logan, who is also the plant manager at Unipress in Forest, said its production dropped 25 to 30 percent during the fourth quarter - similar to that of other suppliers.
Seventy-nine percent of the surveyed companies reported shipping levels below levels of three months ago, while 17 percent reported no change and 4 percent reported an improvement.
The number of companies with a portion of their work force on short time or layoff increased to 54 percent, driven largely by a decline in the U.S. automotive industry.
"Suppliers to other industries may be somewhat better off," Gaskin said. "However, production levels in all segments of manufacturing are falling, resulting in the sharp decline in current shipments. The increase in layoffs and reduced work hours, from 42 percent to 54 percent of our member companies, is significant and probably conservative in that many companies have reported extended holiday closures to reduce costs and balance production to demand."
A flurry of surveys and reports show that manufacturers have ratcheted down with the economy, with nearly 90 percent of the companies surveyed by the organization saying they expected a downturn in orders.
"Many companies are in triage mode. Long-term strategies are being placed on hold for now," said Michael Klonsinski, executive director of Wisconsin Manufacturing Extension Partnership, a private, nonprofit group .
Layoffs and plant shutdowns can help a company get expenses down, but slashing jobs comes at a risk of undermining a company's long-term performance.
"The loyalty of your employees is not going to be as strong," said Charlene Yauch, associate professor of industrial engineering at Milwaukee School of Engineering.
"I am not a big fan of layoffs and shutdowns because of the impacts on employee morale," Yauch said. "But if a company is in really dire straits, certainly an extended shutdown may be a way for them to stop some of the bleeding, improve cash flow and avoid a layoff. And it's not unusual for a company to implement a one-week or two-week plant shutdown. Often then they have the opportunity to do maintenance and use the time to catch up on projects" not done during normal production times.
It's helpful to avoid layoffs so that skilled employees are available when the economy recovers, said Douglas Fisher, director of the Center for Supply Chain Management at Marquette University in Milwaukee.
"You can reduce an awful lot of expense by taking percentages out of top management rather than trying to reduce comparable expenses at the lower wage scale by eliminating quite a few jobs," Fisher said.
"To me, it's a smarter approach to reduce the compensation of people starting with senior management and then working your way down. It sets the example that everyone is sharing the pain. You could lose top management, but I guess that's the risk," he added.
Fisher spent more than 30 years in the freight transportation industry before going to Marquette last summer. He was vice president of international operations and marketing at Yellow Freight System in Overland, Kan., in addition to having held numerous other management jobs at air cargo and trucking services companies.
The recent downturn in the economy has been hard on companies, Fisher said.
"You have to get your costs in line with your revenues," he said. "Otherwise, Wall Street will eat you alive on near-term earnings."
Milwaukee Journal Sentinel writer Rick Barrett and staff writer LaRaye Brown contributed to this report.
Email This Page!