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Plant shutdowns give autoworkers holiday blues
2008-12-18
TWINSBURG, Ohio - The auto industry's enviable tradition of holiday breaks has lost its luster with extended shutdowns that leave workers and car dealers wondering what's ahead in 2009. Chrysler is closing all of its 30 North American manufacturing plants for four weeks due to slumping sales, Ford will shut down 10 North American assembly plants for an extra week in January, and General Motors will temporarily close 20 factories -- many for the entire month of January -- to cut vehicle production. They are the latest moves for an ailing industry that is waiting for word from the White House on a federal rescue package. Chrysler LLC, General Motors Corp. and Ford Motor Co. have been taking dramatic steps as they struggle to survive the recession, with U.S. auto sales at their slowest rate in 26 years. Workers will receive vacation pay during the normal two-week holiday shutdowns. For the extended closures, they get unemployment benefits and supplemental pay that total about 85 to 90 percent of normal wages. "A lot of us realize all the plants are not going to open back up after the shutdown," Mark Blanks, 52, said Thursday as he headed to his electrician's job at the Chrysler plant in suburban Cleveland. "It's pretty depressing. We've got to keep our chins up." Blanks said the job uncertainty had given him a new outlook. "It changes my attitude of Christmas from materialism to spiritualism," he said. "There's no spending for gifts or anything because we don't know how long our reserves are going to have to last." Brian Williams, 39, who supervises an assembly line at the Chrysler plant in Twinsburg, said he was concerned that talk the Bush administration is considering an "orderly" bankruptcy for the automakers would hurt vehicle sales as buyers wonder who would service their new cars. "This country is going into a tailspin. People are going to be afraid to go out and purchase something. I think it hurts everybody," he said between puffs of a cigarette before heading to work. Williams said he would use the extra time off for a vacation. "I'm going to go to Florida, see my parents, take my Harley," he said. At Ford's engine plant in the Cleveland suburb of Brook Park, the company's normal two-week holiday shutdown began one week early and, for now, will end Jan. 5. UAW Local 1250 President Mike Gammella said morale "is as good as it could possibly be" since workers were spared a shutdown beyond the normal New Year's week restart. GM and Chrysler say they may run out of money in just a few weeks without government help. Ford is in better shape because it previously borrowed enough money to stay afloat through 2009. While autoworkers are left to sit home and worry, dealers across the country are doing whatever they can to generate business, even opening up the phone book and making cold calls. Giovani Villanueva, a 25-year-old Chrysler salesman in Fresno, Calif., said so few customers are walking onto the lot that he's resorted to calling people and asking if he can help lower their car payments. "I just open up the White Pages and go down the list of names. I've gotten 10 car deals out of that," he said Thursday, standing in the fog blanketing Fresno Chrysler Jeep. "I was never a fan of getting on that phone and doing the telemarketing stuff, but in tough times you gotta do what you gotta do." Villanueva's boss, dealership owner Tim Finegan, said new car sales are down 40 percent, and he's even having trouble moving his stock of used cars. He's already laid off nearly one-third of his staff in the last year and has cut advertising down to a bare minimum. "I've been in this business since the time of Lee Iacocca and all the bad times we went through in the 1980s were nothing compared to this," Finegan said. "But for now, our lights are still on and our bills are paid, so you just show up every morning and say maybe today will be a little better." Paul Mullane, a fourth generation auto dealer in Lockport, along the Erie Canal in upstate New York, has seen a 15 to 20 percent drop in sales of new Chrysler, Dodge and Jeep models over the past year. That's been offset in part by a 10 percent increase in used car sales. "We'll do, literally, whatever it takes to get somebody in the new car," he said. "The word 'profit' on a new car has been gone a long time. It's not how much money we make on a new car, it's how much money we don't lose on a new car." In Texas, the problem isn't a lack of customers, said Richard Taylor, general sales manager of the Allen Samuels Chrysler dealership in Fort Worth. He said sales have been down slightly and he had only a few 2008 cars left on his lot. But the problem is a lack of financing. "People talk about the problems and the quality, but it's because we haven't been able to loan people money to buy cars and gas did go up," Taylor said. "If you're looking for somebody to blame, there's plenty to spread around. It's not only one thing." Also worried are auto suppliers. Jim Gillette, director of financial services at auto industry consultant CSM Worldwide in Grand Rapids, Mich., said the extended shutdowns would ripple through the auto-parts supplier base. When an automaker stops production at an assembly plant, its suppliers are normally immediately affected, he said. The suppliers can't afford to continue to buy steel, plastic and other materials to make the parts. "It's usually pretty stupid to continue production because you end up stockpiling parts that may or may not be used," Gillette said. "You're taking a huge risk." Lindsey Williams, spokesman for Delphi Corp., which has about 20 plants in North America and supplies parts to the automakers, said the company was assessing the impact of the extended breaks. "We are likely to align our production lines in our facilities to the downtime with the associated customer," Williams said. Chrysler sales were off 47 percent last month and are down 28 percent through the first 11 months of the year. Ford's U.S. sales were down 31 percent in November and are off 20 percent through the first 11 months of the year. The one customer haunting the Fresno Chrysler Jeep lot Thursday didn't offer much hope. George Dublin, an 81-year-old retired computer engineer, had brought in his PT Cruiser for service and wasn't expressing much interest in Villanueva's overtures to swap it for a newer model. "They've definitely got better deals now than when I bought my convertible," Dublin said, leaning against a shiny white model sporting a huge "SALE" sign. "I think Chrysler will ultimately hang in there. But I'm not about to spring for another five years of payments right now." ___ Associated Press writer James Hannah in Dayton, Garance Burke in Fresno, Calif., Carolyn Thompson in Buffalo, N.Y., and Angela K. Brown in Fort Worth, Texas, contributed to this report.
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