Slow sales are to blame and Toledo's economy suffers
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August 21, 2008
There are 2,200 Jeep workers on the Liberty and Nitro lines. They will be laid off for four more weeks through the end of the year. Slow sales get the blame.
After spending nearly eight weeks off the line, Jeep workers returning to their jobs Monday will learn of more layoffs. The union confirmed to us the week of September 22, the week of October 27 and two weeks in November as layoff dates for Liberty and Nitro workers. That's 12 weeks off the line this year for some Jeep workers.
Chris Walker works on the Wrangler line which will not be affected by these new lay-offs. He says rumors are flying of other changes at Jeep. "We're just hearing a lot of rumors about the second shift at the KJ might be eliminated in January; they might offer a package again the third quarter of the fiscal year. It's all rumors."
The union denies those rumors. What is undeniable is the impact these layoffs have on the economy. Toledo stands to lose $250,000 of income tax revenue from this summer's layoffs. It could be another $100,000 with this new round of layoffs just announced.
And small businesses suffer as well. One market owner said, "They're not buying snacks, they're not buying gas, they're not even cashing their checks here."
Commissioner Pete Gerken says the July and August unemployment numbers will be artificially high because of these layoffs, but they do point to a need to broaden our economy. "And continue to do the retraining programs we have in place, continue to do the alternative energy incentives that we have in place continue to grow the parts of our garden that are health and we'll ride it out."
Gerken knows, at least for now, all those workers are going back to good paying jobs. It's easy to say that once these temporarily laid-off workers go back to the job, the county's natural unemployment will shrink. But it is an indication of just how scary a situation it is and how important the auto industry is to Toledo. That 9.2 percent could be low if these layoffs were permanent, especially if sales do not pick up.
Continued stalls in sales could force the elimination of the second shift and 750 workers would permanently lose jobs. But UAW president Bruce Baumhower says there is a silver lining here.
Chrysler has invested more than $3 billion in the two newest plants in North America. He'd rather idle all his workers at once, instead of cutting back daily production and firing some workers. Baumhower says, "So we try to hang on to them and do these inventory adjustments to see how the market's going to shake out."