By Joseph S. Pete, Daily Journal of Johnson County staff writer
Automakers both foreign and domestic are cutting production as cars, trucks and sport utility vehicles sit unsold on dealer lots throughout the country.
Johnson County's largest auto-parts maker has temporarily idled some workers and reduced the hours of other employees as orders have slowed by about 30 percent. KYB Manufacturing North America had been making weekly adjustments to its work force depending on what its buyers - the Japanese automakers - ask for, general manager John Papandreou said.
How many workers are affected varies frequently, but some workers have had to put in fewer than 40 hours a week during the past month. KYB has had to shift its production to mirror Toyota, Honda and others, which have been slowing down assembly lines and taking days off at some plants.
"There's an across-the-board slowdown," Papandreou said. "It's affecting people, but we try to minimize the damage to our associates as best we can."
Few vehicles are selling in the current economic climate, which is making everyone in the auto industry suffer right now, Papandreou said.
Though many of the largest plants have been shuttered, auto-parts suppliers still employ more than 1,000 workers in Johnson County, mostly in Franklin.
"During these dark times, there's probably not a week that goes by where a few of these guys aren't turned loose," Franklin Mayor Fred Paris. "None of the suppliers are immune."
Statewide, more than 110,000 people a week are filing unemployment claims, according to the Indiana Department of Workforce Development. Johnson County's employment rate was less than the state average at 4.9 percent in October, the most recent data available.
KYB isn't suffering as much as suppliers to the Big Three in Detroit, Papandreou said. The Franklin-based plant sells shock absorbers and struts directly to Japanese automakers, including Toyota, Honda and Subaru.
Those companies haven't made any of the drastic and abrupt changes that the domestic automakers have, such as Chrysler's decision to close down all of its plants through Jan. 19, Papandreou said.
But they have been incrementally adjusting production levels of certain makes and models, based on updated sales figures. Sales of many vehicles are down by 30 to 40 percent, so the automakers are cutting production by that amount to avoid flooding the market with unwanted vehicles.
"They take smaller steps more often, instead of just taking big steps like Chrysler did," he said. "But broadly, sales are down."
As a direct supplier to the Japanese automakers, KYB ships out all the struts and shock absorbers it makes to their plants within a day or two, where they're directly installed in vehicles. The company does not stockpile an inventory of parts, so its production must directly mirror that of Toyota, Honda and other automakers, Papandreou said.
The Japanese automakers require that their top-tier suppliers use a "just in time" production model to keep costs down.
If a particular model is selling well, a shift would be called in on Saturday to ramp up production. But no one at the plant is putting in overtime now, which was common just a few months ago, Papandreou said.
Some vehicles are selling better than others, so the KYB employees who build parts for those models aren't affected as much and are putting in more hours. A few pickup trucks, for instance, have been rebounding as fuel prices have dropped.
But sales have been down across-the-board for the past several weeks, even among more popular models, Papandreou said.
In November, Honda's U.S. sales sank 32 percent from a year earlier and Toyota's sank 34 percent, when total U.S. auto sales plunged 37 percent to the lowest level in more than a quarter-century.
"It's hard to say, but when a production line might have been 50,000 units six months ago, it might be down to 30,000 units now," Papandreou said. "These are tough times."