By Kirk Johannesen and Brian Sanders, The Republic
Some local auto parts suppliers are dealing with declining orders and have adjusted by not filling jobs or working shorter schedules.
Detroit's Big Three automakers - Ford, General Motors and Chrysler - are seeking financial assistance from the federal government as they've seen their sales slump first due to higher gas prices, then because of the financial crisis and economic slump.
The decision Congress makes is being watched closely by local suppliers.
"The auto industry is down 20 to 40 percent, and our business is down in that particular range," said Dave Miller, NTN Driveshaft's vice president of administration.
The sales decline dates to April 2007, Miller said, and it has been continuous for 18 months. NTN supplies continuous velocity joints to all major auto companies in North America. Its products go into trucks, SUVs and crossover vehicles: the types of autos that fewer people are buying.
NTN checks its inventory and output constantly, and has scaled back the work force to align production with lower demand, Miller said.
AK Tube is watching daily the markets and products scheduled, and production has been scaled back, said Alan McCoy, vice president of government and public relations for AK Steel.
AK Tube, a wholly owned subsidiary of AK Steel, makes metal tubing products for the automotive industry.
All areas of AK Steel are feeling the effects of the global downturn, McCoy said. Some factories are sitting idle.
Since AK Tube's plant and product lines are geared toward the auto industry, other options are limited, McCoy said.
Trickle-down effect
Lower production at NTN also has meant the corporation is cutting back on orders to its suppliers.
And temporary positions that NTN used to meet higher production orders are now unfilled. That's been the alternative to layoffs of full-time employees.
"Right now we're not eliminating any full-time positions," Miller said.
Whether that will change will depend on the fates of Ford, GM and Chrysler.
"If their businesses fold, that means they don't order from us and we don't make products for them, and that would be a concern," Miller said.
The cause of the auto industry slump is a spillover from the credit markets that have dried up, Miller said.
"Unless (the government) resolves the credit issue and puts more money out there for people to buy cars, we're going to struggle," Miller said.
Regional reaction
Greensburg's GECOM Corp. also is feeling the effects of Detroit's turmoil, but company officials believe its diverse clientele has lessened the impact.
"I know that every employer in the area is making changes in their organization to better fit the downward trend in their sales," said Deborah Ybarra, GECOM's senior manager of organizational planning and human resources.
Recently, the automobile latch, lock and lift-gate maker asked for 45 volunteers stop working from Dec. 8 through Jan. 5.
"This comes in response to the fact that we have a slowing down at Christmas, and the economic slow-down," Ybarra said
"Normally, we're only off for two weeks during that period."
Ybarra said the layoff will affect factory workers in Greensburg and Frankfort, Ky.
She added that the voluntary month-long layoff would mostly affect GECOM's temporary work force.
"We're trying hard to keep permanent people whole," she said.
"We're a little bit better off than some companies ... that changes on a daily basis," Ybarra added.
She explained that it is impossible for most auto industry parts suppliers to survive downward trends without making changes.
In September, losses of more than $50 million in sales forced GECOM to close its North Vernon subsidiary NAC Inc., which had employed 136 workers since opening in 1992.
The shortfall was blamed on GECOM's clientele scaling back in light of consumers seeking cheaper forms of transportation and a slumping economy.
"It is hurting us," Ybarra said of the turmoil in Detroit.
"We have a diverse customer base that protects us somewhat from the big blow that some other suppliers are experiencing."
"We're weathering the storm fairly well considering."
Ybarra said GECOM would be in favor of the proposed government bailout for Ford, General Motors and Chrysler, provided there were strings attached.
"We would like to see the unions make concessions so that they enable the American automotive manufacturers to become competitive with overseas.
"Concessions need to be made before bailout bill can be considered ... it needs to be done correctly and with fiscal responsibility," Ybarra said.
Representatives from Aisin Drivetrain and Valeo Sylvania in Jackson County could not be reached for comment.
Officials at a North Vernon-based Martinrea Industries declined to comment.