Pantagraph.com Weather forecast, local radar and more
MoneyWednesday, November 7, 2007 9:15 AM CST
Comments Comments (2) | E-mail this page E-mail this page | Print this page Print this page | Enlarge type Enlarge type | Reduce type Reduce type | Search archives Search archives | RSS RSS feeds | Add to My Yahoo! Add to My Yahoo!
Auto industry down 150,000 workers
By Katie Merx
Detroit Free Press
Advertisement

DETROIT — With Chrysler LLC’s recent announcement of an additional 12,000 job cuts, the number of jobs to be eliminated from U.S. and Canadian automakers and their former parts arms in the second half of this decade has grown to 150,000 — and counting.

With buyouts or early retirement offers expected at all three Detroit automakers in the wake of new UAW contracts that allow new hires to get less in pay or benefits, the number is sure to grow soon.

And in the future, as the American automakers face competition from more and more rivals from low-cost countries, analysts say, more painful cuts will almost certainly follow.

Just days after hourly workers ratified a new labor contract, Chrysler said it plans to nearly double the 13,000 job cuts it announced in February, now targeting the elimination of more than 25,000 hourly and salaried workers, or nearly one-third of its workforce.

Add the Chrysler cuts to the expected job cuts — at least 137,400 of them — already in the works at General Motors Corp., Ford Motor Co. and its ACH unit, and Delphi Corp. between 2005 and 2009, and the total American job reductions rise to about 150,000. The total, derived from an analysis by the Center for Automotive Research earlier this year and subsequent company announcements, includes the 34,410 hourly buyouts and retirements at GM last year, and the more than 30,000 jobs eliminated at Ford since 2005 and the planned shutdowns and sell-offs of 35 Delphi and ACH plants.

That doesn’t include the thousands of jobs lost at other auto suppliers affected by the downsizing. And still, analysts, union officials and autoworkers say the pain isn’t over.

“We’ve been overbuilding for years and years, and now it’s catching up to us because we’re losing market share,” said Kenyon Hall, a 31-year-old assembly worker at Chrysler’s plant in Belvedere, where the automaker plans to eliminate a shift. “They waited too long to do something. Now it’s going to be painful for a while.”

Analysts expect that even the latest restructurings leave Detroit automakers larger than they will need to be in future.

“Unless there’s significant changes, you will have more cuts,” said Kevin Tynan, auto analyst at Argus Research. “My target for where the market settles out has GM with 20 percent of the U.S. market, Ford with 10 percent and Chrysler at 10 percent.”

Through October this year, GM sales were almost 24 percent of the market, Ford owned nearly 16 percent and Chrysler sales made up almost 13 percent. Combined, they share less than 52 percent of the U.S. market. A decade ago, they had almost 72 percent of the market.

Erich Merkle, analyst and chief forecaster at IRN Inc., a Grand Rapids, Mich.-based automotive consulting firm, agreed the domestic auto industry hasn’t reached the bottom yet.

“In terms of pain, I don’t have a solid number,” Merkle said, “but in my opinion, they’re still working around the edges.”

Video
Most commented stories
Community calendar
Browse online archives
Recent issues:
Reader comments on this story - 2 total

Note: All views and opinions expressed in reader comments are solely those of the individual submitting the comment, and not those of the Pantagraph or its staff.

To you have wrote on Nov 8, 2007 5:41 AM:

" You need to step out of your dream. The union retirement benefits are not out of line with the rest of America. If anything management retirement benefits are out of line. Management salaries and benefits which has increase much more than union benefits is driving up the cost of cars. The union workers ARE interested in making a good auto but they no longer make most of the parts. How are union workers going to improve gas mileage of the cars? Nice try, blaming that onto the union. That is a management problem just like all of their other problems. "

You Have wrote on Nov 7, 2007 8:38 AM:

" the greedy autoworkers and the UAW to blame. This was going to happen it was just a metter of time. When you have a union that was always looking out for the current situation of the employees instead of forward looking this is what happens. The benefit structure and the retiree benfits are way out of line with the rest of america which lead to increased costs to the auto companies which in turn lead to the loss of market share. Not to mention the UAW was not interested in making a good auto that is why the imports become so popular, cheeper, better gas mileage and just as good if not beetr in reliability. The UAW has no sympathy here. "
Add your own comments

Please read the rules before posting comments.

You must be logged in to leave comments.
If you don't have a member ID, please register.

*Member ID:
*Password:
Remember login?
(requires cookies)
  Forgot Your Password?
 
Lee Enterprises Customer Service | 301 W. Washington St., PO Box 2907, Bloomington, IL 61701-2907 | Ph. 309-829-9000 | 800-747-7323
Copyright © 2008, Pantagraph Publishing Co. and Lee Enterprises. All rights reserved. | Terms of Use | Privacy Policy