The government reported another major sign yesterday that the long-predicted recession finally is under way -- industrial output plunged 0.8 percent in March as production slumped all across the economy.
That development came as the Ford Motor Co., trying to staunch mounting losses, announced it will close its assembly plant in Mahwah, N.J., and lay off a total of 15,000 more employes nationwide, bringing layoffs in the auto industry to about 250,000.
In another basic industry, meanwhile, the United Steelworkers union ratified a new contract that officials say could boost the industry's labor costs by at least a third over the next three years. [Details on Page B1].
It was not immediately clear whether the pact violated the Carter administration's 7.5-to-9.5 percent per year anti-inflation wage guideline, and White House officials declined to comment on the settlement pending complex calculations.
Major steel companies currently are pressing for new import restrictions in large part on grounds that their labor costs are so high that they cannot compete against foreign producers.
In other economic news yesterday, the Commerce Department issued revised figures showing the profits of American corporations declined more sharply than expected late last year after adjustment for inflation, with only the oil industry showing improvement.
The developments added substantially to earlier indications that the recession is gathering momentum. The housing industry has been in a slump for weeks, retail sales are falling visibly and joblessness is on the rise.
Treasury Secretary G. William Miller told reporters that "the signs are that we have a slowdown, and this time it appears to be more confirmed across the board." Miller continued to predict, however, that the recession would be mild.
Autos are a problem industry along with housing, and the secretary cautioned that it will be "a difficult task" to arrange financing for another financially troubled auto company, the Chrysler Corp., despite the enactment of new loan-guarantee legislation.
Miller said the new Chrysler loan-guarantee board was likely to be "flexible" in handling the automaker's application, but he said there was little the government could do if the firm could not meet legislated requirements.
The prospect of a continuing decline for the auto industry was underscored yesterday by new figures showing sales of new cars during the first 10 days of April down 24.4 percent from the same period a year ago.
The industry has been plagued mainly by an inability to meet demand for smaller cars.
A spokesman for the United Auto Workers union said that organization now counts about 238,000 blue-collar layoffs industrywide -- 68,000 short-term, because of temporary factors, and 170,000 indefinite. The auto slide began early this year.
The report on industrial production showed the slump in the nation's factory output became far more pervasive in March than it was in previous months. Revised figures for February showed a decline of 0.2 percent.
However, while previous declines were concentrated primarily in the auto industry, last month's sharp drop was felt in virtually every sector of the economy, with production of consumer goods down a hefty 0.8 percent.
The nation's industrial output now stands at a level 1.2 percent below that of a year ago. The 0.2 percent decline reported yesterday for February originally was estimated as an 0.2 percent rise.
The figures showed automobile productions slumped further in March to an annual rate of 7.1 million units, from a 7.2-million-unit pace in February. aAuto output now stands about 25 percent below the rate of a year ago.
The announcement by Ford came as part of a series of expected production cuts at Mahwah and four other assembly plants. The company also said it will phase out two additional facilities in favor of more modern plants elsewhere.
About 8,900 of the 15,000 layoffs announced yesterday will involve blue-collar jobs and the rest will affect white-collar workers. Ford, which lost $41 million in the last quarter of 1979, said the steps were "necessary and unavoidable responses" to the slump in domestic sales.
The revised figures on corporate profits showed profits after taxes fell 0.9 percent during the final quarter of 1979, rather than rising 0.3 percent as reported in preliminary figures. Before-tax profits rose 0.3 percent.
Profits stemming from current production, which are adjusted for the effect of inflation on depreciation and inventory valuation, plunged 2.4 percent during the quarter, the Commerce Department said.
The figures brought after-tax corporate profits for all of 1979 to a level 18.6 percent above a year ago, compared with a 16.3 percent rise for 1978. However, profits from current production rose 6.3 percent in 1979, compared with 11.8 percent in 1978.