A 15-percent drop in Sonata sales since the beginning of 2008 is one reason Hyundai will idle its Alabama plant for 11 days between now and the end of the year (the near-2-percent drop in Santa Fe sales didn't help either). According to Hyundai Motor Company officials, the current sales slump and future sales projections of both models warrant the assembly slowdown. To limit the financial impact on the plant's workers, Hyundai will schedule the days on Fridays, and around the Thanksgiving and Christmas holidays. Hyundai also added, "We will continue to monitor the situation closely and hope that the economic conditions affecting our industry will soon normalize and allow us to return to a full production schedule as soon as possible." You and everybody else.
The old equation holds true: fewer cars sold means fewer workers required to assemble them. This basic truth has been proven once again with GM's announced lay-offs of some 1,500 hourly workers, The cut's breakdown includes about 700 workers from General Motor's Pontiac assembly plant, about 400 each at both its Wilmington, Delaware, assembly plant and its Detroit-Hamtramck facility. In Pontiac, where GM assembles full-size trucks, the worker reduction is necessary as General Motors reduces its output to just 24 trucks per hour from 55 per hour. In Detroit, the General will cut its Buick Lucerne and Cadillac DTS production from 56 units per hour to 38, and in Delaware where the Pontiac Solstice, Saturn Sky and Opel Roadster are built, production has already been cut in half. This announcement comes just days after GM said it would close plants located in Grand Rapids, Michigan and Janesville, Wisconsin.
Tesla is now on its fourth CEO in just 12 months as the fledgling all-electric automaker has announced today that chief fund-raiser, architect and Chairman Elon Musk will take up the mantle from current CEO Ze'ev Drori. Early this morning Valleywag reported that Tesla would be firing up to 100 of its staff and that Drori might be leaving. A call to Tesla SVP Darryl Siry revealed that the story was not entirely accurate. Drori is not leaving the company, but will move over to become Vice Chairman. Exactly what that means is not entirely known at this point, although clearly Musk intends to take a more hands on role now that his Space-X rocket finally managed to get into orbit. Tesla is also laying off some staff, although the extent of lay offs is unknown at this time. Siry promised an official announcement sometime this morning, but we're still waiting.
Chrysler has been struggling with sales declines more than most automakers during this challenging economic environment, and the some of that pain will transfer to its salaried workforce. The Pentastar is laying off 300 workers today and Friday due to the automaker's inability to reach its goal of 1,000 salary job reductions through retirements. All employees have been ordered to show up for work tomorrow regardless of any vacations or if they are scheduled to work or not. Chrysler CEO Bob Nardelli told dealers yesterday that the Pentastar has lost $400 million so far in 2008, which is likely very bad news for Cerberus investors. There are very few feelings that are worse than losing a bunch of money, but we think going into work tomorrow with a real chance of being handed a box and being told to pack your things would be worse.
As reported recently, even though Toyota halted Tundra production for a while, the company pledged not to lay off its workers. At a total cost of potentially $1 billion to the company, Toyota instead placed the employees in retraining and civic works programs during a Kaizen and Development Period.
What kinds of civic programs? One of them, in San Antonio, is called the City-Toyota Green Clean-Up Project, which has put up to 340 workers on the streets to "clean, paint, and plant." Factory staffers have painted curbs, picnic tables and trash cans, trimmed trees and plants, and cleaned up lots. While employees do want to get back to the factories, they're enjoying the time away and being able to give back to the city -- all the while earning their regular wages and benefits.
A second round of city improvement will begin next month. After that, Toyota expects to have all hands on deck again at the factory in November, building 2009-model-year Tundras.
It's been more than a decade since the "recession-proof" Chevrolet Corvette had to endure a production cut due to excess dealer inventory, but that's apparently the case once again. Citing slow sales related to the ongoing automotive recession, GM will turn off the Corvette's factory lights during the week of October 6th. When Vette assembly resumes the following week, production will be scaled back to 15 cars per hour (normal speed is 18.5 cars per hour). Unfortunately, GM says layoffs will accompany the new schedule at the Bowling Green facility, with up to 75 workers losing their jobs. While surprising, the news isn't entirely unexpected. Corvette sales were down 8.5 percent for the year through August of 2008. They only rebounded after GM included the model in its employee pricing sale... and we all know a shot in the arm like that won't hold out over time.
After holding the title for just over six months, the President of Ford Australia has resigned and is moving to the United States to "fulfill a career dream." President Bill Osborne, who took the position only in February, insists his departure has nothing to do with the fact that the company just announced 350 jobs will be cut at Victorian plants. Mr. Osborne is mum on where he is heading, although a company spokesperson said it is outside the automotive industry. Ford has not announced a replacement, but the new boss will have his or her work cut out as the Australian market adjusts from its high-horsepower diet to more fuel efficient vehicles. Sounds familiar, doesn't it?
Toyota is struggling to sell trucks and SUVs like everyone else, but unlike the competition, no full-time workers from stalled factories are getting laid off. The 4,500 workers at idled plants are instead bettering themselves through eduction by taking classes on safety, diversity, and Toyota history. They're also doing community service while on the clock and even some gardening. The workers will be learning how to work faster and smarter during the down time, and are even being shifted to busier plants on a temporary basis to help plants that are working beyond capacity to keep up with demand. Toyota's plan to keep its workers busy at all costs isn't cheap, as about $50 million is being spent to keep workers busy with training programs. Of course, you can't please everyone and the plan isn't sitting well with all of Toyota's workforce, as workers at running factories don't like the fact that laid off workers are getting a leg up on training. A more skilled plant could have an advantage over others in getting earmarked for future products, so unaffected workers also want the extra training. While expensive and a bit of a logistics nightmare, Toyota's plan is a good one if you can afford it. It should help create a more loyal, better trained workforce that also forges ties with the surrounding community. We bet Toyota hopes it will prevent any talk of unionizing, as well. And with Toyota's record profits over the past few years, $50 million is a drop in the corporate bucket.
For white collar workers that still work at the Ford Motor Company: congratulations, you've officially made the cut. Ford's President of the Americas, Mark Fields, announced at a media event that the Blue Oval has successfully achieved its targeted cuts, at least for now. Fields told reporters that Ford would "continue to look at our structure and evaluate that versus the external environment," which is fancy executive talk for "if we don't start making some money, we'll cut some more." Fields didn't reveal the exact number of cuts that were made to achieve that goal.
Ford announced in June that it would cut 15% of its salary-related costs in an effort to become more lean and conserve cash during the brutal automotive downturn. Ford is trying to conserve enough Bennies to pay for its ambitious powertrain plans that will be needed to help the Dearborn, MI automaker offer the fuel efficient vehicles customers want. Fields said that spending on engines and transmissions over the next couple years will be "unprecedented," and that Ecoboost, diesels, hybrids, and other fuel-saving technologies will get the lion's share of the spending. Ford also plans to convert three truck and SUV factories to small car production and add six European models to its product mix.
Sinking sales at its Lexus luxury division have prompted Toyota to lay off some 800 workers at a Japanese plant where certain Lexus models are assembled. All 800 workers were temporary hires provided by an outside agency, and Toyota claims that at least 500 of the temps will be brought back at some point in the future. It seems that Toyota, along with other Japanese automakers, are increasingly using these temporary workers so that they can more easily adjust their payroll to changing market conditions. This tactic has drawn the ire of many in Japan, a country where loyalty is seen as extremely important. In total, Toyota's daily sales rate dropped by 18% last month while Lexus saw an even larger 25% fall, by far the largest of all the major Japanese brands.
