Federal-Mogul to cut 4,000 jobs
SOUTHFIELD, Mich. — Auto parts maker Federal-Mogul says it's cutting its workforce by 4,000 jobs, or eight per cent, due to a tough automotive market.
The Michigan-based auto supplier, which also has operations in Canada, says the cuts are part of a restructuring plan that will streamline business, consolidate or close locations and lower general and administrative staffing.
In Canada, the company has plants in Concord, just north of Toronto, and Windsor, an industrial city in southwestern Ontario just across the Canada-U.S. border from Detroit.
It was not immediately known if the Canadian plants would be affected by the cuts.
The company declined to disclose the specific sites for the job cuts, pending further evaluation and talks with various groups.
The restructuring will begin this month and continue into next year, costing between US$60 million and US$80 million through the end of 2009.
"We are taking actions in response to a downturn in regional markets and global industry outlook," Jose Maria Alapont, Federal-Mogul's president and CEO, said in a release.
"We recognize this is a difficult decision, yet these measures are required to prepare the company for the increasingly challenging automotive environment. The efficiencies gained as a result of these initiatives will strengthen Federal-Mogul's competitive position and help assure the company's future as we continue to implement our sustainable global profitable growth strategy."
Wednesday's moves are the latest cuts to beset the troubled North American auto industry, which has been squeezed by a slumping U.S. economy and rising gasoline prices that have altered the market shift towards smaller cars and away from SUVs and trucks.
In Canada, the auto industry has been hit by a series of layoffs and plant closures as a high Canadian dollar and skyrocketing fuel prices hurt the competitive stance of North American automakers.
Ontario's economy, in particular, has been battered by a weakened manufacturing sector while 88,000 manufacturing jobs have been lost nationally over the last year.
In June, General Motors (NYSE:GM) announced it would close its truck plant in Oshawa, Ont., next year, putting 2,600 workers out of a job.
The Toronto Star reported Wednesday that no GM workers will face layoffs next year because of the truck plant closure. The paper said the Canadian Auto workers Union says more than 2,600 production employees and tradespeople at the troubled plant have already accepted offers to retire early or leave the company.
Earlier this month, Ford Canada (NYSE:F) announced further cuts at its plant in Oakville, Ont., putting another 500 employees out of work.
As well, Deere & Co. (NYSE:DE), the world's largest maker of farm machinery, announced it will be closing its factory in Welland, Ont., costing the Ontario economy 800 manufacturing jobs.