As Ford Motor Co. continues to scale back production, 136 workers at a local automotive plant were given what they hope will be only a temporary vacation.
Many of the workers who took temporary layoffs at Automotive Components Holdlings were senior employees who volunteered to leave to allow younger workers to stay, UAW Local 1216 President Kevin Furr said Friday.
"It's not as bad as it looks," Furr said, adding that only five of the layoffs were considered indefinite (one of them was a retired employee who returned), and all but 53 were voluntary. "This is strictly volume-related, due to down weeks on trucks and SUV plants."
The plant, which manufactures primarily automotive lighting systems and employs about 1,000 workers, was assured to remain in operation for at least another five years after a contract between ACH and the union was approved earlier this month.
But an employee bulletin distributed Wednesday warned workers that hard times were coming, and some layoffs would be imminent. The list of those layoffs was made official yesterday. Decisions were made by department and seniority, with assemblers on the Ford heavy-duty vehicle lines, such as the F-150, 250 and 350, being laid off first.
Furr said he expected a reduction, but he was surprised by how many were cut and how quickly it happened. He said union officials received the names Friday morning in an e-mail, and the layoffs are scheduled to run from June 30 to July 4.
The plant's regular summer shutdown from July 7-18 will still take place.
Those employees on temporary layoff are expected to return on a week-to-week basis, depending on Ford production. Two new lighting programs negotiated in the recent contract are scheduled to arrive at the plant soon, which is expected to bring some workers back.
Senior Ford employees who volunteered for the layoff will receive unemployment as well as sub-pay, which makes up between 85 and 90 percent of their net take-home for up to two years, Furr said. The others received unemployment benefits.
Employees Friday seemed to be understanding of the situation, despite the uncertainty some of them faced.
"I don't think anyone's looking for other jobs yet," said an assembler of a Ford F-150, 250 and 350 line who was temporarily laid off. "We knew it was coming about a week ago because there was a buzz going on around the plant, but we didn't know the details until now."
She said the new contract allows for ACH employees who formerly had a temporary status to be hired on with better benefits as Ford employees if the opportunities become available at other area plants.
Another employee, who also declined to use his name for fear of jeopardizing his position, said he wasn't surprised but hadn't heard many details.
"They don't tell you squat in the front office," he said. "All I really know is what other people are saying."
The letter addressed to employees explains the upcoming reductions are due to a number of factors, including fuel prices spiking from $2.80 to $4.02 in the past year, steel prices nearly doubling and a weakened U.S. dollar. Ford also expects to reduce its salaried workforce soon. By the end of 2008, Ford expects a surplus of 2,686 hourly employees, at a cost of $170 million annually. That surplus is expected to grow to 4,354 employees by 2009, more than doubling the company's costs to $350 million a year, according to the letter.
Annual production dropped from 3.4 million vehicles in 2005 to 2.5 million in 2008, and truck and SUV vehicle assembly plants are operating at only 50 percent capacity.
Ford recently announced significant reductions in production for its third and fourth quarters -- cutting about a quarter of its production schedule in the third quarter alone.
"As gasoline prices average more than $4 a gallon and consumers worry about the weak U.S. economy, we see June industry-wide auto sales slowing further and demand for large trucks and SUVs at one of the lowest levels in decades," Ford President and CEO Alan Mulally said in a statement released June 20 on the company's Web site. "Ford has taken decisive action to respond to this accelerating shift in customer demand away from large trucks and SUVs to smaller cars and crossovers, and we will continue to act swiftly moving forward."
ACH spokeswoman Della DiPietro said all of her company's eight facilities were affected by the cuts.
"Since our plants primarily support Ford production, obviously we need to adjust our production to meet the needs of Ford," she said. "We have three plants scheduled to be idled by the end of the year and five additional plants, including the Sandusky plant."
Ford plans to provide an updated outlook in its second-quarter financial report in July. The company's release stated that unless the economy improves, it will be difficult to break even on a pre-tax basis in 2009.