Automakers to Layoff Additional Workers

In an effort to cope with the continued decline of new vehicle sales and production cutbacks, major automotive plants will be laying off more employees next week. The GM engine plant will be giving notice of layoffs to approximately 340 employees, while only 175 workers at Delphi Corporation’s Lockport plant will be affected.

About 75 employees at Ford Motor Company’s Hamburg plant have already been laid off. The company is planning to shut down operations for a week in early February to further reduce both production and expenses.

According to United Auto Workers contracts, however, employees who are laid off are still paid approximately 95 percent of their total salaries through a combination of unemployment benefits and supplements from the automakers. The goal is to eventually bring back all laid off employees, and the automotive plants are resting much of their hope for a stimulus in our new president.

Unfortunately, there are no predictions of quick turnarounds for the auto industry. Auto sales in the U.S. are continuing to decline and labor contracts are facing a great deal of scrutiny. Both General Motors and Chrysler are being asked to establish detailed restructuring plans to account for the government loans they have received, and all of the automakers are feeling the crunch.

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