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July 18, 2008
Layoffs from Mississippi's auto industry continue to pile atop the weak national economy despite the promise of Toyota-related jobs coming in a year or so.
Suppliers and contractors to Nissan North America, Chrysler LLC. and General Motors Corp. shed more than 300 Mississippi jobs since the spring. Most cuts came in late June and July. Tower Automotive, IMS Autotrans, Martinrea Fabco, Delphi, Johnson Controls and M-TEK Mississippi all laid off recently.
Alice Watson wanted just five more days from her janitorial job at Nissan's plant in Canton.
"I would have hit my three years and gotten paid out for two weeks' vacation," the Jackson resident said.
Her employer, Johnson Maintenance Service, cut her position and those of 29 others under pressure from Nissan so its workers could fill the jobs. That was in April, and she's still job hunting.
While acknowledging the layoffs and economic setbacks, state officials said automotive remains a target industry and growth will continue in the coming years.
Mississippi's unemployment rate jumped to 6.9 percent in May from 5.6 percent in April, the latest figures available.
June's rate likely will be higher, said Wayne Gasson, bureau director of labor market information at the Mississippi Department of Employment Security. The state's auto industry layoffs likely aren't reflected in April and May's rates.
"The unemployment rate is kind of a lagging indicator. Part of that increase is attributable to certain areas of the state we knew had temporary layoffs. Also, this time of year, there's seasonal impact. June is typically the highest month of the year. Most of the high school and college students are counted as unemployed. And in June you've got all the schools' noncontract employees out of work," Gasson said.
Unemployment nationwide held steady from May to June at 5.5 percent, according to the Department of Labor's Bureau of Labor Statistics.
Rising gas prices this spring stalled truck sales, which sent automakers scrambling to cut production. Nissan's Canton plant dropped one of two truck-line shifts and dialed back line speed. It added a third Altima line as the car's demand, particularly the four-cylinder-equipped model, remains high.
Toyota Motor Corp. lowered its 2008 global sales forecast on Wednesday from 9.85 million vehicles to 9.5 million. GM Chief Executive Officer Rick Wagoner said Tuesday the company will chop truck production by 300,000 units on top of three truck plant closures announced last month. With drastically fewer trucks being built, suppliers' work gets cut.
"The market is terrible," said Jim Gale, plant manager at Brown Corp. of Greenville. "A couple years ago, you'd kill to get truck parts. Now you'd kill to get rid of them. Automotive is very cyclical. It's either feast or famine. You've either got people laid off or you've got people on overtime."
His plant cut 31 of its 300 employees in late June. The plant makes structural steel parts for truck seats in the Dodge Ram and internal dashboard structures for Visteon Corp., which supplies Nissan Canton. Visteon in June said it will close its facility in Durant by mid 2009.
"Four-dollar-a-gallon gasoline is territory that's harmful for working-class families, poor or rich. And the poor economy spills over into the automotive sector," Gov. Haley Barbour said last week.
Despite the challenges, state officials believe the auto industry can bring well-paying jobs to Mississippi. Barbour said he's confident in Nissan's plan to build light commercial vehicles, a niche that's dominated by Ford.
"Japanese companies have proven themselves to be strong competitors," he said. "We have three sectors in our economy that are counter-cyclical: energy, defense and auto. Toyota is building the plant, and suppliers have to come. Those are guaranteed jobs."
Toyota executives decided last week to build the next-generation Prius in Mississippi rather than Highlander crossover sport utility vehicles. Economics prompted the change, as Toyota isn't selling enough Highlanders to sustain an entire factory. Since Prius sales spiked last year and are forecast to continue doing well, Toyota decided to build Highlanders in Indiana, where employees build the platform-mate Sienna Minivan.
Half a dozen suppliers have committed to building in Mississippi to support the Toyota plant.
Melissa Medley, communications director at the Mississippi Development Authority, said auto recruiting will continue despite the economy.
For Nissan Canton, which plans to replace its passenger trucks with the light commercial vehicles in 2010, MDA will help recruit suppliers for any parts the current chain won't supply.
"On Toyota, they haven't made their final sourcing decisions, but they're honoring their commitments to suppliers. They've told me their suppliers are in the family," she said. "This decision to build the Prius here gives us the opportunity to recruit new suppliers who may not have been making a model in America."
To attract auto companies beyond Nissan and Toyota, MDA will use the same tactics and benefits that helped land those automakers. They include pointing out that Mississippi's work force is often trained but under-employed and that the state has open land, opportunities for green manufacturing, and training programs tied to its financial incentives.
"Then the rest of it is getting down project to project and understanding what they need," Medley said.
Leland resident Debbie Woods was laid off from her parts production job at Brown Corp. in June.
"It's my third time being laid off since 2001. Manufacturing is a tough industry here in the Delta," she said.
Woods previously worked at Hager Hinge and Textron Fastening Systems in Greenville.
She filed for unemployment and is applying for jobs. A single woman at 51, she's also trying to keep from selling or giving away any of her pets. Her two horses, two cats, and three dogs are family.
Woods' manufacturing experience makes her the kind of worker Medley said the state hopes to keep employed.
"Even if there are layoffs, the work force is still here and still trained," she said. "That's why we tie our incentives into work force training because if the situation changes, they can go right into something else."
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