Slowing consumer demand will idle 1,900 auto workers in Virginia and Maryland in the next two months, 1,600 of them employed by Ford Motor Co. in Norfolk.
The layoffs are the latest in a series of actions that have knocked 175,000 people out of work this year nationally in plants that assemble vehicles and components, according to figures compiled by the Motor Vehicle Manufacturers Association in Detroit.
Many of the layoffs are temporary, such as the two-week layoffs that begin at Ford's Norfolk pickup truck assembly plant next week. But other layoffs are "indefinite," meaning they could last a long time. That is the case at General Motors Corp.'s minivan plant in Baltimore, where an estimated 300 of the plant's 3,500 workers will be out of jobs indefinitely beginning Jan. 22.
"It's all a result of the current economic downturn," said Rodney Trump, president of United Auto Workers union Local 239, which represents hourly workers at the Baltimore assembly plant for Chevrolet Astro and GMC Safari minivans.
"People are getting nervous," Trump said. "Folks who have a dime feel that they have to hold onto that dime as long as possible. They feel threatened because companies have been announcing layoffs all year long all over the United States. They don't know if they're going to be next."
Such consumer anxiety has led to a 14 percent reduction in the GM plant's production, which has fallen to 119,153 minivans in the first 10 months of this year from 136,000 in the same period a year ago, plant spokesman Terry Youngerman said. Seventy percent of the Baltimore minivans are sold as private passenger vehicles and 30 percent are sold to businesses as cargo vans.
But both businesses and private consumers "seem to have a lack of confidence in the economy," Youngerman said. "They seem to be cutting back equally" on purchases, he said.
The Ford and GM layoffs are the most recent to affect auto workers in the region. Decreased business spending led to production cutbacks and layoffs at Volvo GM Heavy Truck Corp. in Dublin, Va., last month, according to officials of that joint-venture company.
Earlier this year, the southwest Virginia plant had been producing heavy-duty cargo trucks for commercial customers at the rate of 60 trucks per day, but declining orders reduced that output to 42 trucks daily in mid-October, company officials said. About 350 of the plant's 1,500 workers were put on indefinite layoff.
Thage Berggren, president and chief executive officer of Volvo GM Heavy Truck, said that in August the company thought it could boost its truck production above 60 per day. But rising oil prices in the wake of Iraq's invasion of Kuwait forced Volvo GM to reassess its plans and to order the cutback in October.
Prior to the Iraqi invasion, heavy-truck industry analysts were predicting 1990 sales of 165,000 heavy trucks in North America, which still would have been 16 percent below 1989 sales. Analysts now estimate North American heavy truck sales will drop 20 percent below 1989 levels and will fall another 10 percent in 1991.
Not all is gloomy, however. At Chrysler Corp.'s Newark Assembly Plant in Delaware, nearly 3,600 hourly workers have been employed on two shifts turning out Chrysler LeBaron, Dodge Spirit and Plymouth Acclaim passenger cars. "What layoffs?" a Chrysler spokesman asked. "We don't have any layoffs at that plant. Those cars are catching on."
They are "catching on" partly because Chrysler has been offering sales incentives on those models, along with driver's-side air bags as standard equipment. A buyer conceivably could drive away with a reasonably well-equipped Acclaim for about $10,000. Chairman Lee A. Iacocca said in a recent interview with The Washington Post that the company is not making much money on those deals. But the Chrysler spokesman said that does not matter much to the people employed in Newark. He said, "That plant is going great guns."