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Wed January 14, 2009
Many Manufacturers Cut Jobs Fast, Others Cling To Workforce
Kansas City, MO –
For decades, advancing technology and globalization chipped away at American manufacturing jobs. Until recently, though exports were up. US industry was doing OK. No more.
Mr. Galt: We're in a very severe down turn that's got little precedent, since the depression. At the moment we're still declining, we're declining very fast.
Nigel Galt, with IHS Global Insight says many manufactures are cutting deeply into one of their most important assets, their workers.
Others are holding on, hoping for a quick recovery. Frank Morris of member station KCUR in Kansas City reports.
This time two years ago the market for big, over the road, trucks was strong, and the Haldex plant near Kansas City, which makes brake parts for these trucks, had the pedal to the metal.
The plant is a maze of automated milling machines, and assembly lines, all coated with a thin patina of grime and heavy use. Jay Longbottom, the guy in charge of this part of the company, says back in the day he couldn't tolerate a minute of downtime.
Mr. Longbottom: I remember the frustration of what do we need to drive this faster, what do we need to do get these machines up to full production. I mean we need this output desperately.
Then orders screeched to a stop.
So did the new machines. The plant's not producing half what it did two years ago. And while Longbottom use to scramble to get parts in time now he's delighted to see supplies start to run low.
Mr. Longbottom: It's a big, a huge part of coping with things right now, is getting your inventories down, and generating the cash flow as we come through this.
Longbottom's cut staff, too, by almost a third, and trimmed hours for the rest. The survivors are mostly, quick, analytically-minded, detail freaks, who run high-tech machinery. Skilled factory workers like these are desperately hard to come by. And Employers hate to let them go. But, facing the biggest down turn in modern history, many are just out of options.
Mr Ore: It is a total interruption of demand, so people take very drastic actions to try to make sure that they survive.
That's Norbert J. Ore. He's the guy who writes the Institute for Supply Management monthly Report on Business.
Ore says the plunge in orders last month forced manufactures to cut production fast. They responded with the biggest jobs cuts in a quarter century. But then there's Bob Bundschuh.
Bundschuh's company Pretech, hasn't laid off anybody yet.
Mr. Bundschuh: We've talked to the guys and they would much rather work less hours, but keep their job, then pick four or five people to let go.
The floor shakes as a huge machine rattles and squeezes a freshly cast section of concrete pipe big enough to hide a small family. Pretech, here in Kansas City, Kansas makes storm sewers, as well as concrete utility boxes and manholes. That business collapsed last summer, when builders stopped putting in new subdivisions. But Bundschuh says he's holding on for the federal stimulus package.
Mr. Bundschuh: One of the first thing you do in any building, is you put in sewers. We're in before the roads are in.
Bundschuh expects his business to pick up by Spring. Most economists aren't so optimistic. Jay Longbottom the brake part manufacturer, says US industry's in for a long, uncertain recovery. And he fears that a lost generation of highly-skilled factory workers may prove impossible to replace.