After years of layoffs and rehirings, some 1,200 employees at Charlotte-area Freightliner truck and parts plants learned Thursday that they could soon be out of work again.
Freightliners parent company, Daimler Trucks North America, announced layoffs at its plants in Gastonia, Mount Holly and the Rowan County town of Cleveland.
Oregon-based Daimler blamed a softening of the North American commercial truck market. It described the cuts as temporary layoffs, meaning the company might rehire some workers later.
The biggest cuts are planned at the Freightliner truck plant in Cleveland, where 715 people or a third of the work force could lose jobs, according to a required layoff notice given to the state.
An additional 405 workers are likely to lose jobs at a Freightliner plant in Mount Holly, while 80 could be laid off at Daimlers Gastonia Components and Logistics business.
The layoffs are expected to take effect April 1.
The news sparked a fresh round of worry for officials and residents in the three towns, many of whom have grown weary from recent cycles of layoffs and rehirings by Daimler.
In April 2008, for instance, the firm laid off about 1,500 workers at its Rowan County plant but announced four months later that it would call back 650 employees because of an increase in truck orders.
The company in 2009 announced plans to lay off more than 2,100 workers in the region, citing a sharp decline in customer orders. But in early 2012, about 1,100 workers were called back.
President Barack Obama visited the Mount Holly plant last March and called the new jobs a sign of the economic recovery.
At the time, the company said there was increased demand for trucks and parts in the United States, Australia, New Zealand and South Africa.
Industry analysts, however, say demand has since flattened, and is expected to remain down for much of this year. In the fourth quarter, the U.S. economy shrank for the first time in more than three years.
All of the U.S. truck manufacturers are currently seeing very flat or reduced orders for new trucks for delivery in the next two quarters, Timothy Kraus, president of the Heavy Duty Manufacturers Association, wrote in an email to the Observer.
Some economic recovery had increased recent amounts of truck freight, he wrote. But fleets being uncertain of tax policy, the economy and freight numbers have chosen to keep their trucks longer, as opposed to ordering new ones.
Gastonia Mayor John Bridgeman called Freightliner a good corporate citizen, but added: If it were me and I worked there and had to lay in bed at night wondering if I had a job the next day, Id almost start training for something else. I dont think Id like all that uncertainty.
In Rowan County, where the Cleveland plant is the third-largest private employer, the job losses could have a ripple effect on other companies, said Robert Van Geons, head of RowanWorks, the Salisbury-Rowan Economic Development Commission.
Every time we take the proverbial two steps forward, he said, something knocks us back.
Most job cuts in N.C.
Daimler, one of the worlds largest heavy-duty truck manufacturers, said in a statement that it resorted to the layoffs due to the present softening of economic conditions that has adversely impacted the entire North American commercial vehicle industry. The cuts, the firm said, will synchronize current production rates to incoming orders.
Daimler said a final decision on layoffs would be made after all other operational solutions are exhausted. But if all the local cuts materialize, they would comprise the overwhelming majority of cuts Daimler is making across its North America division.
The company said it would give layoff notices to approximately 1,300 production workers.
Donny Hicks, executive director of the Gaston County Economic Development Commission, said that despite the layoff announcement, Freightliner is building a 311,000-square-foot warehouse to support its parts plant in Gastonia. The $25 million facility is slated for completion in August.
Its very positive that they are willing to invest, Hicks said. Freightliner is incredibly important to the county for jobs, investment, tax base and utilities. Hopefully, business will come back by the third or fourth quarter.
Hire and let go
Commercial vehicle industry analysts say the layoff-to-rehiring cycle isnt unique to Daimler.
They say the health of the market for commercial trucks depends heavily on the broader manufacturing sector. Manufactured goods travel by truck; if theres less demand for those goods, theres less demand for trucks to carry them.
When demand in consumer-driven economies like the United States falls off, it immediately hits the logistics industry and results in lowered demand for items like big trucks, said Jeff Henning, a partner and automotive markets expert with Ernst & Young.
Truck manufacturers respond by trimming workers.
In the past five years, its been very common to hire and let go, hire and let go, said Chris Fisher, a senior commercial vehicle analyst with Power Systems Research in St. Paul, Minn. Demand has been very choppy and unpredictable.
Should the Daimler layoffs go through, the newly unemployed workers will enter a tough job market. The unemployment rate in Gaston County stood at 10.5 percent in December. Rowan Countys was 9.7 percent.
Paula Heafner, who works at the Circle A Food Store near the Freightliner plant in Mount Holly, said employees stopping there seemed to expect the layoffs.
Ive heard a few who were worried about how they were going to pay their bills, she said. But a lot dont seem to be that worried. They feel like its a temporary thing if it does happen.
Cleveland Mayor John Steele said the uncertainty could make it hard for employees to make long-term plans, including whether to seek other employment.
Our thoughts and prayers go out to the family members, said Mount Holly Mayor Bryan Hough. For anybody who gets laid off its hard on the family and finances and has an effect on the economy.
The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.
Have a news tip? You can send it to a local news editor; email email@example.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.Read moreRead less