Cook column: Freightliner giveth, taketh away
Everyone knew it was coming. Employment at the Freightliner plant in Rowan County is always volatile. There was no reason to think the company could keep everyone working when other companies are laying people off left and right.
Still, when news came to the Post last week that nearly 1,300 workers would be idled in March, it hit hard.
Another Post employee stood by as reporter Mark Wineka confirmed with a Freightliner spokesman what family members had already told her: no more second shift.
Two people in her immediate family would lose their jobs.
And anyone still assembling trucks on Freightliner’s first shift has to feel nervous.
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Freightliner employees are painfully aware of the new, million-square-foot plant the company is building in Saltillo, Mexico ó a city of 1.2 million that has become a mini-Detroit of vehicle manufacturers and parts makers. It is the state capital of Coahuila in northeast Mexico.
Saltillo has been home to two of the largest auto manufacturing and assembly plants in Latin America ó including GM plants that do motor and transmission assembly, body part stamping and car assembly. Chrysler built a plant there to produce engines, while nearby another was assembling Dodge Ram trucks.
When Freightliner announced in late 2006 that it would be joining the crowd in Saltillo, the outlook for selling heavy trucks was bright.
“We were not able to produce what we could have sold in 2006 due to capacity constraints,” company President Chris Patterson said at the time. “We expect another surge in customer demand in 2009 prior to the next round of EPA emissions regulations … so this plant will ensure that we are fully prepared.”
A story in Site Selection magazine quoted a Freightliner executive as saying Mexican economic development officials were more professional and focused than their U.S. counterparts, and communities offered more support ó incentives, in other words. “Freightliner Gets What It Needs in Coahuila,” the story’s headline said.
There hasn’t been a union strike in that state in 14 years, the magazine says. “They have very strong unions ó but the unions are pro-jobs and pro-business.”
The president of the country, Felipe Calderon, attended the groundbreaking in 2007.
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It gets worse. Freightliner COO Roger Nielsen told Site Selection magazine in 2007 that the area immediately around the Cleveland plant ó i.e., Rowan County ó has a shortage of skilled workers.
“U.S. states offer incentives for locating in disadvantaged areas,” the article says, and then quotes Nielsen, ” ‘but what you find out is the skills are not there.’
“That is what Freightliner now faces at its Cleveland, N.C., plant, as the state’s economic development success with some projects has in some ways depleted the work force for others.
” ‘We are capped out because of immediately available work force in that immediate area,’ Nielsen says. ‘We operate three shifts, drawing people from up to 80 miles away to our factory. Many employees get fatigued with that, and as soon as they can find a job closer on a day shift, they take it, and at a wage cut. Even where we’re at in North Carolina, we’d love to expand ń great quality, great energetic work force. But at the peak of our market in 2006, we were losing 25 people a week. That’s about how many it takes to build one truck per day.’ ”
What Nielsen failed to say was that Freightliner was also losing people to steady jobs that don’t disappear every time the economic wind changes direction.
Freightliner has been good for Rowan County. It has paid thousands of people a good wage ó and is still doing so. But there’s always that uncertainty. Freightliner giveth and, when business slows down, it taketh away.
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Along with U.S. jobs, Saltillo now has U.S. headaches ó the near-evaporation of demand for the vehicles and parts local factories make.
Freightliner’s new plant has been scheduled to start production next month. If that happens, you have to wonder who will buy the Cascadias it is to produce ó the truck model also produced in Rowan.
The Wall Street Journal says 2009 could be the worst year for freight-transportation volume in three decades or more ó which translates into a bad year for companies making the trucks that move freight.
“U.S. trucking companies are projected to buy just 101,000 tractor trailers next year,” said the Dec.11 story, “down an estimated 22 percent from this year and 64 percent from two years ago …”
That was the year Freightliner couldn’t make trucks fast enough.
When the market picks up again, where will Freightliner hire workers ó in a city of a million with lots of experience in vehicle manufacturing, or a county of 130,000 where turnover is a problem? And, no doubt, wages are higher.
As one Oregon Web site said after Freightliner closed its Portland plant, laid-off Freightliner workers face “a job market that’s suddenly cooler than a parked sleeper rig at dawn.”
Unless they want to migrate to Mexico, they better not count on many more years of making trucks.
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Elizabeth Cook is editor of the Salisbury Post.