E.I. duPont de Nemours & Co. is shutting down a major part of its nylon fiber production plant in Chattanooga, reducing the plant's work force by more than one-third. An article in the July 4 Business & Finance Section incorrectly reported that the entire plant would be closed.
At the Bumble Bee tuna cannery in San Diego, 900 people lost their jobs recently when the parent Castle & Cooke Co. surrendered to plummeting demand for the fish and closed the plant.
In Louisville, 3,900 people have been laid off from General Electric Co.'s major-appliance plant since last summer. The reason: the slumping housing market has reduced demand for the refrigerators, ranges, washers, dryers and dishwashers made at the factory.
More than 1,300 meat packers who worked for the John Morrell divison of United Brands Inc. have been laid off this year as the company closed four plants. Two more plants are to be closed by the end of August, idling another 750 workers.
These may be blips on the nationwide unemployment charts, but they are symptomatic of a pattern that appears to be occurring in many parts of the country and in many different industries: workers for profitable, stable corporations are being laid off like their counterparts in troubled or money-losing industries.
The massive layoffs in housing, steel and autos and related industries such as lumber, copper and tires have gained national attention. Yet smaller but rising numbers of workers also are losing jobs in electronics, food processing, textiles, machine tools, petroleum and other industries that still generally are profitable.
In their effort to stay healthy, many companies are cutting back obsolete or marginal operations, dropping unprofitable divisions and reducing production and inventory. Their workers are finding that profitability gives no guarantee of job security.
The pattern of layoffs is erratic. Some corporate giants such as Burlington Industries in textiles and Sherwin-Williams paints have dropped workers in some plants while adding them in others.
But overall, the jobs have been disappearing, a hundred here, a thousand there, even in companies that are on solid economic ground. Many of these jobs have disappeared permanently because they are in plants that are not going to reopen even if the economy recovers.
According to Bureau of Labor Statistics figures, unadjusted for seasonal variation, the number of people working in non-farm jobs in June was 301,000 higher than in May, but 1.3 million below the 92.05 million employed in June, 1981.
At the same time, state and local government payrolls, a traditional employment refuge in hard times, also are declining. Last year, for the first time since World War II, the total number of people holding state and local government jobs dropped--by 276,000--according to the Bureau of Labor Statistics.
The trend of layoffs by profitable companies has not reached Washington, but federal, state and local government payrolls have been cut by 30,000 workers since 1980 and will fall even more as jobs are eliminated by budget cuts, reductions-in-force and deregulation of business.
Corresponding reductions in jobs by government contractors and consultants have pushed the District of Columbia jobless rate to 10.6 percent--well above the national unemployment rate of 9.5 percent--and have produced a 6 percent jobless rate for the area.
Many of the cutbacks by profitable companies are relatively small when compared with such disasters as the bankruptcy of Braniff International airlines, which threw about 8,000 people out of work overnight. But Braniff had been on the brink of insolvency for months.
Similarly, International Harvester Co. has put 10,000 workers on indefinite layoff and last week said it would furlough 3,200 in Rock Island and East Moline, Ill., for two months this fall--the third time this year many of those employes have found themselves out of work for an extended period.
The company's financial situation has become so precarious that a key portion of its newly negotiated contract with the United Auto Workers requires it to give workers plenty of advance notice before closing plants temporarily or permanently.
Such are the risks for employes of money-losing companies. But now workers for healthy corporations are following them into unemployment--or into early retirement, which many firms are offering with sweetened benefits to lure senior employes off the payroll.
3M Co., a supplier to the steel, auto and housing industries, has laid off 1,345 hourly production workers scattered among more than 100 plants. To avoid more layoffs, the company is offering 2,300 workers early retirement with six months' extra pay.
Dravo Corp., a Pittsburgh-based engineering and heavy-construction firm, earned $17.3 million on revenues of $1.51 billion last year, but reported a loss in the first quarter, and its workers are feeling the consequences.
Dravo has cut its work force to 7,050 from about 8,500, and "these are not people who are going to be called back," a company spokesman said. Dravo also has frozen salaries and cut capital spending, which in turn will cost somebody else work later in the year.
At that perennial darling of Wall Street, Xerox Corp., whose profits last year topped $598 million, the sagging economy and intensified competition in the copier business have led to what Xerox calls a "work force resizing program."
Since August, Xerox' employment has shrunk by 3,300 workers, including 500 salaried and 100 hourly employes let go in May. Voluntary retirement and the phasing out of some temporary and contracted positions accounted for much of the reduction, but many people were laid off outright. While some of the reductions are attributable to a corporate reorganization, a spokesman says "the people-cutting would be more the result of the economy."
Competition from abroad, identified as the source of problems--and ultimately, unemployment--in the auto and steel industries, also has found victims in other businesses.
Last week SCM Corp. announced that it will close a Smith-Corona factory near Cortland, N.Y., that produces portable electric typewriters because they no longer are competitive with typewriters imported from Japan. Company officials say they have been frustrated in attempts to win government help in a fight against what they say is the dumping of Japanese typewriters on the U.S. market. Four hundred jobs will be lost when production is moved to an SCM plant in Singapore late next year.
Many companies, like 3M, are offering early retirement in an effort to avoid further layoffs, putting people out of work but technically not swelling unemployment rolls.
This technique was used earlier this year by Dow Chemical Co., which reduced its U.S. work force by 1,951 employes to 37,000 when 58 percent of those eligible for early retirement accepted it. "The suggestion there is that, if those 2,000 elected the early-retirement option, they will not be replaced by a commensurate 2,000 new employes," Dow spokesman Rich Long said.
Monsanto Co., where 200 St. Louis employes have taken voluntary retirement, has reduced the number of workers in two plants in another fashion. Three hundred workers in nylon plants in Pensacola, Fla., and Greenwood, S.C., are on "work-sharing"--in effect, splitting a job between two people.
Each affected employe works two weeks, and then has two weeks off while another worker fills the job. "It's to their benefit, because they're working and collecting a salary, and it's to Monsanto's benefit because we don't have to retrain people," said Susan Kelly of Monsanto.
Another nylon plant, owned by E.I. du Pont de Nemours & Co. Inc. in Chattanooga, Tenn., is closing completely, however, putting 500 people out of work.
But Faith Wohl, speaking for the company, insists that the closing is not recession-related. "It's a recognition that the equipment we have there is no longer competitive," she says, also remarking on a worldwide glut of capacity for nylon production.
Monsanto, however, acknowledges that the recession has hurt the nylon business. "You sell nylon to people who make carpets, and people who make draperies, and people who make car seats," Kelly says. "The auto and housing industries are not booming places."
The problems in housing also have hurt GE's Louisville appliance operations, although most of the rest of the giant conglomerate's businesses are thriving.
"There ain't no way if appliances are down that GE is going to be up," says Arthur Demaris, a GE spokesman. "When the housing industry is in the shape it's in, there's no way GE cannot be affected. We're hoping that there's a pent-up demand out there for housing, and that, when it turns around, it will turn around good." Demaris says GE hopes eventually to bring all 3,900 employes laid off at Louisville back to work.
The drop in oil and gasoline prices caused by the international glut of oil has caused many companies in that customarily healthy industry to reduce employment. Farmland Industries Inc., a farm-supply company, put 48 people out of work in Scottsbluff, Neb., when it closed a small oil refinery because of declining demand for gasoline. Farmland also shut a refinery in Kansas, putting more than 100 people out of work.
Other healthy companies that have dropped workers in some divisions or plants include Westinghouse Electric Corp., Ralston-Purina, Texas Instruments and Gillette Co.
Bucking the trend is International Business Machines Corp. An IBM spokesman said IBM never has had any furloughs or layoffs, and is planning to increase its employment by 10,000 workers this year.