2,800 Jobs To Be Slashed As Auto Parts Maker Close Factories

The auto industry has witnessed the problems facedcreating approximately 800 jobs in Mexico and in
by the U.S.' Big Three and how such a situation hassome countries in Eastern Europe. This strategy is
forced these companies to slash down jobs. The Fordbeing used by companies to take advantage of the
Motor Company, General Motors, and the Chryslergrowing globalization. With countries offering incentives
Group have been implementing restructuring plans in aand lower wages, companies are exploiting this
bid to upset the loss they have incurred the pastsituation to help them get back on their feet financially.
couple of years or so. These companies' restructuringThe announcement came after the company
plans includes workforce reduction and the closingannounced that they have lost $94 million for the
down of assembly plants as well as reducing workingsecond quarter of the fiscal year. The said figure is a
hours on some facilities. This occurrence has been afar cry from the $45 million profit that the company
big blow to the state of Michigan where the threehas gained for the same period last year.
biggest American car manufacturers reside. MoreAside from closing down plants and workforce
recently, a new blow to the state comes when autoreduction, the company also announced that they will
parts maker ArvinMeritor Inc. announced that theybe freezing the company's pension plan for U.S.
have incurred substantial losses in the past fiscal yearemployees. The said measure will be effective by
and therefore will be closing down 13 plants which willJanuary 1st next year. The said step is expected to
result to cutting down 2,800 jobs.affect at approximately 3,800 American employees.
The company reported that the 13 plants that they areEmployees who expect to get additional benefits until
forced to shut down are located in North America andJune 30, 2011 will be affected adversely by the said
Europe. In Europe, the company will be closing downstep taken by the company. While the company will be
four plants while the remaining nine facilities that will befreezing pension plans, they will increase their
closed are located in North America. The companycontributions to the savings plan of their workers. This
reported that this restructuring plan in the face ofstep is a necessary one to appease workers who
financial difficulties will be using up an estimated $325depends on the pension plans that the company will
million. So far, ArvinMeritor has only named one plantsoon be putting on hold indefinitely.
that it will close down in the near future. The companyWith the auto industry facing a change in trend, it is
based in Troy, Michigan announced that their assemblyexpected that it will affect not only car companies but
plant located in Frankfurt, Germany will be closedalso other companies involved in the production of
down. Currently, the company has about 27,500automotive components such as brake parts which
employees working on their more than 110 productioncan be found at Active Brakes Direct. With
facilities all over the world.ArvinMeritor closing down plants and freezing pension
While the company will be cutting down jobs, theyplans for American workers, it would be a big blow to
have also announced that they will be creating jobs onthe American auto industry. But with a competent
what the company calls "low-cost sites". This is donerestructuring plan, the company is expected to get
to reduce the money that the company will have toback to profitability as Ford, General Motors, and
shell out for the wages of their employees. The autoChrysler are expected to do.
parts manufacturer announced that they will be