Workers fear job cuts with reports of losses

07.11.2008 10:01 Shopping - Source: toledoblade.com

Both companies, which employ thousands in Ohio, are spending billions more than they're making amid the worst economic crisis in decades.

Among GM's factories are the Toledo Powertrain plant, with 1,350 hourly employees, and the Defiance Powertrain foundry, with about 1,500.

Both companies say that factory production needs to reflect declining sales, which means job cuts.

According to Ford's top sales analyst and two people briefed on GM's plans, neither automaker plans to announce factory closures, although they are likely to cut production by eliminating shifts or temporarily closing plants. The people briefed on GM's plans did not want to be identified because the plans are confidential.

George Pipas, Ford's top sales analyst, said the company has made heavy cuts in truck and sport utility vehicle production and will announce cuts at some car and crossover plants today.

Ford's top manufacturing executive told union officials in September that Ford has 4,200 more blue collar workers than it needs.

GM had about 125,000 U.S. hourly employees in 2003 and expects that to be 62,500 by the end of this year.

The company announced the closure of four pickup truck and SUV plants this year, but has yet to make corresponding cuts in engine, transmission, and stamping operations.

Both automakers are expected to report huge losses when they release third-quarter results this morning, a day after their CEOs traveled to Washington to make the case for federal aid for the industry.

Industry analysts estimate that Ford and GM are spending around $1 billion a month above their revenue. With credit markets frozen and with their credit ratings having fallen to junk, both have had difficulty borrowing more money, raising the prospect that they could run short of cash.

GM sales were down 45 percent in October and 20 percent through the first nine months of the year, according to Autodata Corp., and Ford sales were off 30 percent last month and 19 percent through October.

GM shares closed Thursday at $4.80, down 76 cents, or 13.7 percent. Ford shares closed at $1.98, down 11 cents, or 5.3 percent.

  Add comment

Name:
E-Mail:
Comment:
Enter code: