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Saturday, November 11, 2006

Dublin plant plans layoffs

Many say the decision by Volvo Trucks and Mack Trucks was expected, but its magnitude was not.

Volvo Trucks North America and Mack Trucks Inc. announced Friday that they would reduce employment at their Dublin plant by about 1,000 people -- roughly a third of its current workforce -- beginning in January.

The layoffs do not necessarily come as a shock.

Talk of a coming downturn began at the plant over the summer, and by October, employees said that expected layoffs were a regular part of lunchroom and break room chatter.

Truck manufacturers, industry experts and union officials have also been bracing for a downturn to accompany new emission regulations that will come into effect in 2007.

Gary Hamrick, hourly bargaining chairman for United Auto Workers Local 2069, said in October that the question was never whether there would be layoffs. "It's just a matter of how deep they'll cut," he said then.

After learning that the plant would cut 1,075 of its 3,170 jobs, Hamrick said he was a little surprised.

"That's quite a bit deeper than I anticipated."

Hamrick figured that based on expected production rates, the plant's work force might go down by 800 or 900.

Plant worker Larry Yates, who will keep his job, said talk on the floor was of layoffs of about 600.

A reduction of just over 1,000 jobs will affect not only more people, but also people who have worked at the facility longer. Layoffs are based on seniority, and Hamrick said he believes these will affect people who were hired as far back as 1998.

According to a news release, the layoffs will occur incrementally over the first quarter of 2007, beginning in January.

January 1 is when the emission regulations that precipitated the layoffs will take effect.

Aimed at improving air quality, the regulations are part of a series of increasingly stringent diesel emissions standards implemented in 2002, 2007 and 2010. Beginning in January, heavy-duty truck manufacturers must use new technology that reduces emissions of nitrogen oxide and soot.

The cost of the technology, coupled with customers' wariness of new products, had Heavy Duty Trucking magazine warning of a downturn seven months ago.

"Many fleets are clamoring to get trucks with the current engines before the '07s hit, which could cause a big financial hit to manufacturers in 2007, if sales take a nose dive," according to an article published in April.

Volvo spokesman Jim McNamara said Friday that manufacturers industrywide are indeed feeling the effects of a "pre-buy," in which customers are stocking up on trucks before they require new, more expensive engines.

As a result, McNamara said, manufacturers "expect sharply lower demand in the first half of 2007. We are anticipating that the decline could be as much as 40 percent during the first half of 2007."

McNamara added that he doesn't make forecasts on how long the downturn may last, but the company is working to persuade customers to adopt the new technology as soon as possible.

Cycles of high and low demand are nothing new in the trucking industry. Nor are the patterns of layoffs and worker recalls that follow them. In fact, Hamrick said, some of the employees who will be laid off are already familiar with the drill.

"Some of those employees, this is their second layoff since they've been at the plant," he said.

The last time the Volvo plant suffered layoffs of this magnitude was in the late 1990s.

McNamara said that approximately 1,800 employees were laid off between December 1999 and December 2001, as a result of overcapacity and a substantial economic downturn in the truck market.

Those layoffs dropped the number of total plant employees to 1,500.

Many of the employees laid off in 2000 and 2001 were recalled in 2003 and 2004 when large orders and the addition of the Mack production line, pumped plant employment up to about 2,500 by May 2004.

McNamara said the most recent layoffs are considered permanent.

If market demand changes and the plant needs to add employees, however, it would recall union employees according to seniority.

In the meantime, Hamrick said that laid-off union employees with more than one year of service in the plant are entitled to negotiated benefits, with supplemental unemployment benefits that can range from $220 to $260 a week, depending on whether people choose to receive unemployment benefits.

Benefits last at least 26 weeks, Hamrick added, depending on length of employee service at the plant.

UAW Local 2069 represents 98 percent to 99 percent of the plant's work force.

McNamara said employees who are not union members will receive between two weeks and six months of base pay, based on their tenure with Volvo.

In a joint statement, Pulaski County Administrator Peter Huber and County Board of Supervisors Chairman Joe Sheffey said the layoffs would be felt well beyond plant walls.

"Pulaski County feels deeply for the many individuals and families affected by this loss of jobs," the e-mailed statement said. "Since a large number of the affected employees live in other parts of our region, this will affect the entire region."

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