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Old 12-07-2009, 10:50 AM
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Freightliner moving truck production to Mexico, raising fears of more layoffs

Hundreds of people have been laid off from Daimler Trucks North America’s Components and Logistics plant in Gastonia and its Freightliner Truck Manufacturing Plant in Mount Holly since 2007, as demand for its vehicles fell to lows not seen for decades.

As of mid-November, about 627 people were working at the Gastonia plant compared to 1,126 in March 2007. In Mount Holly, 128 workers remain from a work force of 1,499 in March 2007, according to officials with the United Auto Workers.

Daimler Trucks North America estimates that 54 percent of its truck production will take place in Mexico by 2011, up from 30 percent last year, according to a company newsletter e-mailed to The Gaston Gazette.

The newsletter dated October 2009 highlights the company’s Continuous Cost Improvement or “CCI” program. Given the expected shift in DTNA’s production footprint, the CCI Mexico Sourcing Team is tasked with relocating or developing suppliers near plants in Saltillo and Santiago, Mexico, the newsletter states. The overall goal is to reduce the cost of materials and logistics by $2,000 per truck.

“With DTNA’s new manufacturing footprint, more than half of DTNA‘s trucks will be produced in our plants in Saltillo and Santiago,” the newsletter states. “Therefore, we need to adapt our supply base by relocating or developing suppliers in Mexico to minimize our logistics costs and take advantage of lower labor rates. This effort is crucial to stay competitive in the NAFTA market.”

Scott McAllister, president of the local United Auto Workers 5286, said the newsletter upset local workers as it circulated through Daimler’s Components and Logistics plant in Gastonia. As production shifts to Mexico, McAllister said workers are concerned that Gastonia will be the source of fewer parts and more people will lose their jobs.

“Here’s a letter saying they’re actually trying to source parts to Mexico,” McAllister said. “It’s only a matter of time. The writing’s on the wall.”

But DTNA spokeswoman Maria McCullough said the company’s Mexico Sourcing Team is not working to relocate in-house parts manufacturing from Gastonia to Mexico. Citing the recall of 180 workers to the Gastonia plant since July, including 25 this month, McCullough said Gastonia workers are benefiting from the company’s efforts.

“Our Gastonia plant employees have directly benefited by the higher vehicle sales rates that DTNA has been able to achieve by our increased competitiveness in North America,” she said.

The company is working with its suppliers in the U.S., Canada, Europe, Asia and Mexico to “shorten the supply line from their existing factories to our factories located in Santiago and Saltillo.” But DTNA also has a team working to shorten the supply line between suppliers and factories in the Carolinas, McCullough said.

The company newsletter explains that Washington-based Consolidated Metco Inc., one of DTNA’s biggest plastic suppliers, is building a facility for plastic injection molding in Monterrey, Mexico, to supply Saltillo and Santiago.

“The plant‘s formal start of operation is planned for end of Q1 2010, although they are performing light assembly of cabinets on site already now,

the newsletter states. “The business case leading to the decision of moving a significant portion of the manufacturing to Monterrey is based on the manufacturing footprint of DTNA and the future model distribution.”

At the same time, McCullough said ConMet is “boosting its capabilities in the Carolinas (Monroe and Bryson City) relocating some production lines from elsewhere for both plastics and aluminum castings.”

You can reach Business Editor Daniel Jackson at 704-869-1833.

Workers at Daimler’s Gastonia plant certified for benefits

The U.S. Department of Labor recently certified workers at Daimler Trucks North America Components and Logistics Plant in Gastonia for Trade Adjustment Assistance (TAA).

The TAA program offers extended unemployment benefits, health care tax credits and job training to employees who lost their jobs because of competition from increased imports or shifts in production outside the United States.

“The U.S. Department of Labor is committed to supporting all workers, including those who are faced with the prospect of layoffs or work reduction resulting from trade,” said Secretary of Labor Hilda L. Solis.

All employees of the Gastonia plant totally or partially separated from employment from July 15, 2008 through Nov. 13, 2011 are eligible to apply. The Gastonia plant was TAA certified because it produced parts for Daimler’s Cleveland Plant Truck Manufacturing Plant, which is TAA certified along with the Mount Holly Truck Manufacturing Plant.

The Mount Holly plant was TAA certified earlier this year because DTNA has shifted production of some medium-duty M2 business class trucks to Mexico. As of mid-November, DTNA was making about 60 M-2 trucks per day at its plant in Santiago, Mexico, compared to seven trucks per day in Mount Holly.

DTNA officials nearly idled the Mount Holly plant in March because of declining demand. Company officials say they are making trucks in Mexico to stay competitive in the North American market during the economic downturn. Workers in Gaston County say they’ll never be able to compete with cheap Mexican labor.

A decision is expected to come soon in an arbitration case involving claims that Daimler violated a provision of it current labor contract, guaranteeing that 70 percent of the M-2 truck would be made in Mount Holly. That contract expires in April 2010 and labor costs will be a prime topic of discussion in upcoming negotiations, DTNA spokeswoman Maria McCullough said.

Scott McAllister, president of the local United Auto Workers 5286, said the TAA certification is helpful, but employees are finding that those funds are limited. In February, a $1 million National Emergency Grant was also allocated through the Work force Investment Act to assist Freightliner workers with retraining.

Officials with the N.C. Employment Security Commission in Gastonia could not be reached last week to determine the amount of funding available through the TAA program.

Other companies with Gaston County workers recently certified for TAA:

- American & Effird: Workers engaged in color matches and samples laid off between May 19, 2008 and Oct. 7, 2011 are eligible because American & Effird “acquired from a foreign country articles like or directly competitive with samples produced by the workers” which contributed to job loss in Gastonia.

- Robertson Airtech International, Inc.: Workers engaged in production of ventilation ducts and air washers and servicing of ventilation, heating, air conditioning, and refrigeration systems laid off between May 18, 2008 and July 13, 2009 are eligible because “the firm has shifted to El Salvador and Honduras the production of articles directly competitive with those supplied by the workers.”

- Stabilus Inc.: Workers separated March 1 and Feb. 27, 2011 are eligible because the company increased its reliance on imports in January compared to January 2008, while employment and production at the Gastonia facility continued to decline.

- Parkdale Mills Inc.: Workers at Plant No. 10 in Gastonia (which closed this year) laid off between Jan. 26, 2008 and April 6, 2011 are eligible because they lost important business supplying yarn to a rug manufacturer, w hose workers were also TAA certified.

- A. B. Carter, Inc.: Workers laid off between October 31, 2007 and Dec. 3, 2010 are eligible because the company shifted a portion of production of steel ring travelers to India and is increasing its imports of that product.

- Stowe Mills Inc., Belmont: Workers at the National and Helms plants in Belmont (which closed this year) laid off between Jan. 13, 2008 and Feb. 2, 2011 are eligible because the company lost important business supplying dyed and finished yarn to a manufacturer of fabric and apparel products, whose workers were TAA certified.

- Gaston Electronics, LLC, Mount Holly: Workers that produce printed circuit boards and control panels used in various electronic products laid off between May 18, 2008 and Sept. 23, 2011 are eligible “because imports of articles like or directly competitive with printed circuit boards and control panels produced by Gaston Electronics increased during January through April 2009 compared with the corresponding 2008 period.”

- Bradington-Young, LLC, Cherryville : Workers laid off between Feb. 5, 2008 and Feb. 18, 2011 are eligible because the company has increased its reliance on imported products from China like the upholstered leather furniture manufactured at Bradington-Young in 2007 and 2008.

http://www.gastongazette.com/news/pe...d-america.html
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Old 12-07-2009, 12:43 PM
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Don't know about the rest of the world but here in the U.S. freight is down because of the economy.

There are fewer loads to be hauled and truckers are fearful of being able to keep up with the payments on their current trucks, so buying new trucks is out of the question.

When times get tough, you tighten your belt. You don't buy new equipment when you can make your current equipment work a bit longer.

If truckers bought new equipment today, the bank would only end up repossessing a lot of it.

And why not move your plants to Mexico, which happens to have lax environmental laws, different benefits laws, different (and lower) taxation on business?

Moving across the border could result in an automatic savings of millions per year for a company as large as Freightliner.
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