By Derek R. Smith, Daily Reporter
dsmith@greenfieldreporter.com
GREENFIELD - Economic tremors in the automotive sector have trickled down to two more Hancock County companies, who are idling workers as they try to become more efficient as work dries up.
Eaton Corp. is eliminating about 30 jobs as it phases out its Greenfield heavy-duty remanufacturing operations. It also intends to study the viability of its remaining operations here, where before the layoff 100 people helped build truck transmissions.
And Indiana Automotive Fasteners, which employs about 340 people, has offered voluntary temporary layoffs to 39 employees. The company, which, like Eaton, has a plant on New Road, says the employees will be welcomed back when the economy improves.
The Eaton employees will not be back. The 30 who have lost their jobs will receive a severance package and outplacement support, said Don Alles, communications manager for Eaton's Truck Group.
"We are acutely aware of the effect that this has on our employees," Alles said. "These employees that are affected are our colleagues and our friends. This has no reflection on the quality of work that they've done for us. They've done a great job at Greenfield."
Eaton ranked 207th last year on the Fortune 500 list of America's largest corporations, according to cnn.com. The Cleveland-based company had revenues of $15.1 billion for 2008, Alles said. Eaton has more than 225 manufacturing facilities worldwide.
Even though the firm announced last week that it would lay off 5,200 employees companywide because of the economy, the economic environment doesn't have a whole lot to do with the move to transfer the Greenfield remanufacturing operations to a third party, Alles insisted. The move will take place in the second and third quarters.
"It was more a decision of how can we best serve our customers," Alles said. "We're in a constant process of weighing the costs and benefits of building products in our own facility vs. moving some of those products to the outside. I would suggest to you that we've been looking at this for several years."
At IAF, the company has faced a decreased demand for its products. About 70 employees filled out the paperwork to go on voluntary layoff, said human resources manager Kathy Robbins.
"I think the kicker was they still have medical insurance," Robbins said. "I don't think a lot of companies are contributing people's medical insurance. They're making them go to COBRA."
IAF makes fasteners for virtually all parts of an automobile.
Employees on the layoff are welcome to come to the facility at any time and are still considered employees, Robbins said. They must return to work by July 20; if necessary, IAF will put a second group on temporary layoff at that time, she said.
"It's unfortunate that it's come to this," Robbins said. "Let's just pray for this economy and that people start buying cars."
Eaton's plant, which opened in 1996, produces thousands of varieties of built-to-order transmissions.
Eaton's Greenfield facility is part of its Kalamazoo, Mich.-based Truck Group. The Truck Group had revenue of $2.25 billion in 2008 and has about 20 manufacturing facilities worldwide, Alles said. Customers for the local plant include major trucking companies like Freightliner LLC and Volvo Group.
Eaton's Truck Group will take a 16 percent cumulative reduction in its workforce, including reductions taken in 2008, according to an Eaton statement e-mailed to the Daily Reporter.
"In addition to the reduction in workforce, Truck is considering further actions to provide greater cost efficiencies and to position itself for growth as markets return to normal," the statement says. "This is a continuation of Truck's efforts over the last several years to tune its operations for greater cost-efficiency and customer satisfaction."
The Eaton statement also says the company has begun a study to "determine the viability of the remaining Greenfield operations."
"We're exploring options related to the future of the facility," Alles said. "That could take many directions, none of which I'm privy to... Not knowing what those options are, I can't speculate on whether closure is on that list of options."
Eaton announced Monday that its fourth-quarter earnings plummeted 36 percent due in large part to the recession. The cuts announced last week are intended to help Eaton reduce costs by $125 million in 2009.
Worldwide, Eaton has cut back its workforce by about 10 percent, down from a high of around 80,000.
The Associated Press contributed to this report.