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Auto industry meltdown hurts employees of Columbia part manufacturers

Wednesday, June 24, 2009 | 12:01 a.m. CDT; updated 6:23 p.m. CDT, Sunday, July 12, 2009
Larry Houston works on the only assembly line still operating at EPC. A year ago, four people would have been stationed along the line that he sometimes operates on his own.

Jesse and Valerie Dutton have next to nothing in their bank account.

"We had a decent savings,” Jesse Dutton said, “but now we've gone through it, and after all the bills are paid, we usually have less than $10 in the bank.”

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After 14 years in automotive manufacturing, Valerie Dutton was laid off in February. Jesse Dutton, who works for Engineered Plastic Components Inc., has held onto his job on the company's assembly line, but he clocks in significantly fewer hours. The plant makes instrument panels primarily for Mitsubishi cars.

As the auto industry continues to erode, three of Columbia’s four auto parts manufacturers — Engineered Plastic, Dana Corp. and Otscon Inc. — have been forced to cut costs. Parts suppliers across the country have been hobbled by depressed auto sales and production shutdowns at both General Motors Corp. and Chrysler.

The Obama administration made $5 billion available to help GM and Chrysler pay suppliers earlier this year, but last week he rejected a request by suppliers for up to $10 billion in additional loan guarantees.

The fallout is hitting Columbia hard. Last year, Dana Corp. laid off 186 of its 351 workers, and in February, Engineered Plastic Components trimmed 22 employees from its workforce of 48. Four of the remaining 26 employees are hourly workers on the plant’s assembly line.

Financial challenges aren’t new to Engineered Plastic Components. It purchased the property in September 2007 after manufacturer Collins & Aikman filed for bankruptcy and closed its doors.

"We can't lose faith that we can rebuild," the company's senior engineer Dave Arnold said, citing an emphasis on improving efficiency.

He said layoffs at Engineered Plastic Components have been a difficult but necessary response to "drastically reduced" output.

Columbia's overall economy will suffer if the auto industry continues to decline because laid-off workers drawing unemployment will not be spending as much at Columbia businesses, he said.

"It puts a knot in your stomach, when you get to know someone, and you have to force hours on them or lay them off," Arnold said.

The city has long been a prime location for auto parts manufacturers, as businesses are able to supply parts to automakers in both St. Louis and Kansas City. Yet, as the nation's automakers declare or verge on bankruptcy, the climate has changed for parts suppliers and their employees.    

Auto parts makers make up the largest sector in the manufacturing industry nationwide, according to the Original Equipment Suppliers Association. These  manufacturing jobs represent 5 percent of Columbia's economy, and Bernie Andrews, president of Regional Economic Development Inc., said the city will continue to see a decline in its manufacturing base.

“With Missouri losing its assembly plants, they're not selling as many cars, they don't need as many parts, so the parts manufacturers are shutting down or laying off,” Andrews said.

Glen Stevens, a representative of equipment suppliers association, said more than two-thirds of the content of a vehicle is made by suppliers rather than automakers. Thus, Stevens said, suppliers “really take it on the chin” when automakers halt production.

For Columbia residents without post-secondary education, auto parts manufacturing has been a lucrative option for work, Andrews said. "Manufacturing jobs pay well, and typically have good benefits," he said.

Dana Corp. has cut its work force in Columbia by more than half. The plant supplies axles and drive shafts, among other parts, to Ford, Chrysler, and General Motors, as well as other auto companies.

Local plant manager Mark Howard said his company is in “very challenging, tough times,” reporting a 43 percent decrease in sales.

"We've worked with the state of Missouri to find jobs for laid-off employees," Howard said, expressing hopefulness for the employees remaining at Dana Corp.

"We've maintained stability since the beginning of the year," he said.

To prevent additional layoffs, Dana Corp. workers are taking voluntary one-week breaks without pay throughout the year to offset the company's continued loss of revenue.

Adam Withrow works on the assembly line at Otscon, manufacturing Honda Civic brake pads. While Withrow said there have been no layoffs, he reports a decline in production. Otscon, at 50 N. Rangeline Road, specializes in parking brake systems and brake pedals.

Withrow also said his overtime, attendance bonuses and pay raises have been eliminated. He said he and his family are trying to save money in anticipation of more cutbacks.

"We're rescheduling a summer trip for this winter to save money," he said, "and we're moving to a smaller place when our lease is up."

The fourth auto parts manufacturer in Columbia, Gates Corp., makes rubber and small auto parts in Columbia. Gates did not wish to comment on company production or the impact of the auto industry on its employees.

While Columbia’s auto parts suppliers are hopeful that the market will turn around for workers, the failures of major auto corporations make that hope harder to come by.

Meanwhile, Larry Houston, an assembly line specialist at the plant, said the economic downturn has transformed the workplace.

"Three years ago, there were 324 people working here,” said Houston, who now struggles to stay on top of his bills. “You could barely find a seat in the cafeteria."

Now, with all but four assembly line workers laid off, the cafeteria is often empty.

 


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Comments

paul twentyseven June 24, 2009 | 4:35 a.m.

Gates corporation has had several large layoffs throughout the year with many more to come. Many city analysts expect the company to fold by years end, giving reason I'm sure, for the silent responses to reporters.

(Report Comment)
Ray Shapiro June 24, 2009 | 4:53 a.m.

If companies were able to diversify and work on new technology to change the course of our dependency on traditional automobiles, they might be able to cross-train their employees and not have to cut these dedicated, loyal workers loose.
My heart goes out to the newly unemployed.

(Report Comment)
Charles Dudley Jr June 24, 2009 | 5:01 a.m.

ray shapiro why not let the Libertarians help them to privatize? Oh that's right they are privatized and failing.

Auto industry was privatized and even with huge bail outs folded under.

So much for privatizing things as the Libertarians want every body to do.

No it does not have to be socialized at all but ray you are correct about serious restructuring to create new things for the new and future age of transportational needs.

Sorry John about the blatant stab at Libertarians and their wanting to privatize everything but this is just a prime example why often times privatization does not work all of the time as Libertarians believe in the ideal world.

No hard feelings bro.

(Report Comment)
Ray Shapiro June 24, 2009 | 5:36 a.m.

In a truly free market, Detroit auto plants would not get "bailed out.
The "bailout" provides no incentive for these companies to diversify. I believe that our government, (both "W" and Obama), are not considering the impact their disregard for proper application of "laissez-faire" will have on "free-enterprise." Of course, as both are into power and "big-government" they probably relish in the idea of the government having a hand in everything.
Printing up, and giving out money to accomplish this, ultimately hurts the average citizen and does not, in the long-run, protect America's sovereignty.
Global economics will be the death of us....

(Report Comment)
Annie Pimple June 24, 2009 | 8:07 a.m.

What do you do for a living Chuck? Where do you work? Any layoffs at your place of biz?

(Report Comment)
Mark Foecking June 24, 2009 | 8:36 a.m.

ray wrote:

"...work on new technology to change the course of our dependency on traditional automobiles"

Well, it's really not that we need new technology - we have everything to make perfectly funtional cars now. It's that, with the economy contracting, people felt uncomfortable making a large purchase like a new car. Coupled with last summers SUV glut, Detroit's shortsightedly building the car of the past for the future, and out of control labor costs, Detroit can't make ends meet.

The best way to restructure the industry is to let it shake itself out. It's not like we don't have more than enough cars for everybody now.

DK

(Report Comment)
John Schultz June 24, 2009 | 8:38 a.m.

Chuck, the issue is not just privatization, but also government regulation and interference. Where is the federal government derive the power to tell auto manufacturers how fuel-efficient their cars are or that they should have air bags and seat belts? All are good features to have, but that should come from competition and innovation.

Why should a private company be forced to accept a union on its private property? I'm all for people banding together for their common good, but don't let the government force the union upon the company.

Finally, the companies should have been allowed to fail. We celebrate innovation and creation in America, but too many people don't realize that failure is also an option in all business endeavors and cannot be completely avoided.

(Report Comment)
Annie Pimple June 24, 2009 | 8:57 a.m.

Unions have a sweet deal. The health care bill would tax employer provided benefits unless you are a union member. The government also screwed over bondholders to give the UAW a better deal on GM.

(Report Comment)
Charles Dudley Jr June 24, 2009 | 11:49 a.m.

>>> Finally, the companies should have been allowed to fail. <<<

I completely agree with this statement 100% They should have been allowed by they cried loud enough and the tax payers got screwed once again.

(Report Comment)
steve devine September 30, 2009 | 7:43 p.m.

I don't blame the gov't, the unions or the OEM's. I blame our college's. What in heavens name are they teaching our leaders? Help your self and screw your neighbor! Econ 101 supply and demand. We took away demand when we took away jobs by putting them off shore. The demand is no longer in the USA, it is now in China. Nobody is gearing up to save USA jobs they are gearing up to sell product in China. NAFTA started this mess and Global out sourcing will finish it. We oue too much money to too many people to just say NO. Dems and Reps are not standing up for the average American worker. They are standing with the Warlord Corp Execs.

(Report Comment)
Charles Dudley Jr October 1, 2009 | 4:36 a.m.

steve devine well said.

(Report Comment)

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