By Derek R. Smith, Daily Reporter
dsmith@greenfieldreporter.com
GREENFIELD - Keihin Indiana Precision Technology has reduced its workforce and cut production over the past two months after a decrease in orders from Honda Motors.
Keihin IPT, which manufactures fuelmanagement systems for a wide variety of Honda vehicles, has laid off about 100 temporary workers; asked for volunteers for temporary layoffs; and reduced most operations to two shifts. In boom times, the plant has operated three shifts a day.
But the recession has forced even the stoutest companies - including the Japanese automakers - to cut back.
"Pretty much all automakers have had a pretty significant reduction in sales, especially since probably about September of last year," IPT Vice President Greg Young said Tuesday in an interview. "Our customer, which is basically Honda, have had those kind of reductions as well. We did really pretty well through 2008 up until that point. I think everybody has been down since then. Honda has been impacted as well, so we've been impacted."
D o m e s t i c auto sales have plummeted in recent months as the U.S. economy has gone into recession. Toyota, Honda, General Motors, Ford and Chrysler each reported drops of more than 30 percent in sales in December.
For the year, GM's sales fell 23 percent from 2007, while Toyota's sales fell 16 percent. Ford's sales for 2008 fell 21 percent, while Honda's 2008 sales fell 8.2 percent.
In addition to its plant here, Keihin also has facilities in Muncie, Tarboro, N.C., and Capac, Mich. The company celebrated the 20th anniversary of its groundbreaking in Greenfield last year.
"I think the biggest difference this year vs. maybe other downturns in the past is the fact that there's not cash available, either," Young said. "Credit is very difficult to come by, and now sales are down and so a lot of suppliers are having that cash crunch and are having difficulty from that standpoint."
IPT typically uses temporary workers from staffing companies to deal with production fluctuations, but managers had to lay off about 100 temp workers in November and December due to decreased demand from Honda, Young said, adding that IPT has also released contractors.
The reductions bring IPT's employee count to about 1,000. It's still the county's largest employer.
"We've also taken volunteers... for a layoff. It's a temporary layoff; they're still employees of the company," Young said. "But we don't have work for them, and so they basically have to leave and then they get unemployment through the state. Right now, we have a little over 50 people who are out on voluntary layoff."
As Honda orders have slowed, IPT has also reduced much of its operations to two shifts, Young said.
"When we made those reductions (of temporary employees), we had a number of things on three-shift operations," he said. "We changed those to a twoshift operation pretty much across the board. There's just a couple of areas that still do three shifts. But when we did that, it allowed for us to go to a four-day work week, but we're still doing 10-hour days, so everybody still gets their 40 hours in. But where it helped us is... to be able to do our normal equipment maintenance and things on Fridays. Ultimately, we could save money on utilities and save with some overtime as well by doing things on Fridays instead of on the weekends."
Also, there have been a handful of days when IPT has shut down the plant due to low volumes, Young said. Employees have chosen between taking vacation or going without pay on those days, he said.
IPT managers have done everything they can to help their employees as much as possible amid the downturn in the auto market, Young said.
"Times are tough, and nobody likes to have a cutback in their overtime or their hours or anything," Young said. "But I think in general we've heard a lot of positive comments just from the fact that we're trying to do what we can for our associates."
Honda sold 86,085 vehicles in December, down more than 45,000 vehicles from December 2007 but up about 10,000 vehicles from November. Most automakers saw the month-over-month improvement from November to December.
Although some observers expect things to get better for automakers in the second half of the year, IPT managers are planning as if the downturn will continue throughout the year, Young said.
"We really don't even know if we've really hit bottom or not," he said. "I know there are some projections that overall auto sales will be down a little bit more even in 2009 than they were in 2008. So we are trying to plan for something I don't want to say worse, but at least at the same levels."
The Associated Press contributed to this report.