Auto parts industry stalls, costing jobs
Overseas competition, high steel prices cited
CHICAGO -- The automotive parts industry once meant job security for the thousands of workers who toiled in plants in the Midwest and South. Employment was plentiful, and workers in places such as Plymouth, Mich., and Gordonville, Tenn., lived relatively comfortable lives, laboring with an eye on retirement and a decent pension.
That peace of mind, however, has vanished for many of those workers as auto parts plants have closed or moved overseas since early 2002 because of rising prices for US steel and competition from products made in China.
"I was a [steel] presser and now I'm a handyman," said Lewis Wood, who was laid off by Arvin Meritor Manufacturing Corp. in Gordonville a year ago. This summer, the plant shut down, leaving more than 300 workers jobless.
Talking by phone from Ideal Tavern in neighboring Carthage, Tenn., Wood said being out of work is the subject of "steady conversation" at the bar. "The auto industry here is real bad, and it's either sending people into a depression, into a life of crime, or sending them looking for work in other towns," he said.
Neal Zipser, spokesman for the North Carolina-based Motor and Equipment Manufacturers Association, said the tariffs on foreign steel that President Bush imposed in March 2002 caused US steel prices to rise. The administration is studying whether to repeal the tariffs on raw steel; they were scheduled to remain in place for three years while the steel industry restructured.
"The number one reason layoffs and closings are occurring in the auto supply industry is that these companies must now compete in a global marketplace at a time when the value of the dollar is extremely high against the euro and Japanese yen," Zipser said.
The tariffs, Zipser said, have forced companies to buy more finished-steel products made overseas and led to the loss of 210,000 US jobs in industries that use steel. About 2.2 million people work in the auto parts industry.
Ford Motor Co. has announced that by 2010, it will use $10 billion worth of parts made in China. "That means $10 billion will be lost to American companies unless these companies can think of a way to open plants overseas," Zipser said.
Like Ford, Metaldyne Corp. of Plymouth, Mich., plans to obtain more parts overseas. Dana Corp. in Toledo, Ohio, one of the nation's largest parts suppliers, has laid off 15,000 workers.
"Last year, 90 percent of the steel we purchased came from the US," said Kurt Ruecke, a spokesman for the Plymouth plant. "Next year, 40 percent will come from offshore, and that will cost us between 500 and 600 steelworker jobs. It's crazy and it makes no sense."
Stress abounds for the workers who remain with companies where large layoffs have occurred. "They end up having to work longer hours to replace workers. They are struggling with rising health care costs," Zipser added. Job stress will be one of the major topics at the trade group's convention in the fall.
Last month, disgruntled workers at two auto plants shot and killed fellow employees. Two people were murdered in a shooting at Andover Industries in Andover, Ohio, when a worker opened fire. Six people were shot and killed when a discharged employee of Windy City Core Manufacturing Co., randomly fired at his coworkers in the Chicago plant.
Although it is alleged that both men responsible for the shootings had psychological problems, the current workplace situation in the auto industry, Zipser said, "needs to be watched."
Wood has followed the shootings. No one he knew was enraged enough to take lives, he said from his seat at the Ideal.
"These are bad times, and my suspicion is they will get worse before better," Wood said. "Lots of us come in here for a beer to try and figure out how we got in this position. What we decide is that it's better if we just try to reinvent ourselves in another business or trade."
John Doyle, owner of Doyle's Tavern near Plymouth, Mich., doubts that the US auto industry will ever fully recover.
"It's been bad here in Plymouth and Detroit for some time now. Things got worse in the past two years, so unemployment and hard times in the auto industry aren't new to us," Doyle said. "All you have to do these days is pick up the local papers, and every day you can read what's happening to the American auto industry. It's never good news."
