WINCHESTER — Winchester will receive a triple blow to its economy this year as three automotive parts factories plan to cut more than 450 jobs from the community.
The reductions reflect the wide reach of the plummeting automotive industry.
"It's just something that none of us have ever seen, and we're trying to do the very best we can to survive," said Bill Patterson, general manager of Niles America Wintech Inc., one of the three companies cutting back. The companies are:
Niles America Wintech: The maker of switches for cars will lay off at least 150 workers during the next few months, cutting from 224 employees down to about 50.
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GECOM Corp.: The manufacturer of door locks, latches and lift-gate systems will relocate its Winchester operations to Frankfort or Greensburg, Ind., and close the facility in April or May. The Winchester plant employs 168.
Ainak Inc: The company makes rubber and plastic parts, metal stampings, hose assemblies and foam. It will go from 123 full-time and 14 temporary employees to 33.
On Tuesday, some of the employees who will be laid off said that they would consider a return to school. Others still hadn't developed a plan for what they would pursue after their last day at the plant.
"I'll probably go back to school, be retrained and just lay low for a year or two waiting for the economy to turn around," said Mike Julick, manager of the tool and die department at Niles America. "I'll be OK."
Employees said the announcement of layoffs hit some co-workers pretty hard.
"Some are upset, mainly ones who bring in the only income in the family and have kids," said Patsy Davis, 31, a team leader at Niles America.
Keith Adams, 37, a University of Kentucky graduate with a degree in electrical engineering, is a project manager at Niles America, where he has worked for more than five years. He hopes to find another engineering job, but knows the job market looks bleak. "Times are tough and there's not a lot of hiring going on," he said.
Adams' wife is a school district nurse, so the family with two children, ages 7 and 13, will still have an income, for which Adams is thankful. "But I don't know that any job is 100 percent secure," he said.
Over at Ainak, employee Linda Stidhem, 44, said she has considered going back to school for nursing. "Several girls here are thinking about that, but I don't know if the jobs will be there," she said.
Layoffs at three similar companies in one city would be a bit unusual in a stable economy, said Justine Detzel, chief labor economist at the Kentucky Office of Employment and Training. But "this recession has been more severe than any since World War II, which is why you're seeing more layoffs than you would expect."
Julick said the effect of the layoffs will reach beyond Clark County. Many of his co-workers commute from Clay City and Stanton, he said.
"With Clark County being as small as it is, three factories closing is going to have a big impact," said Julick, 46. "That leaves a lot of people with no job. And a lot of good people work here."
Automotive supply companies are struggling to stay afloat as car sales decline, said Kim Hill, associate director of research at the Center for Automotive Research, a non-profit organization based in Ann Arbor, Mich.
Demand for parts is drying up as automakers idle assembly plants temporarily or slow production, Hill said. But some automakers also are delaying payments to supply companies, which are normally paid about 45 to 50 days after they deliver parts. Now payment might not come for up to 60 days.
And supply companies need money to buy raw materials and stay in business, Hill said.
"They're caught in a really hard spot," he said.
Automotive supply companies also cannot take on making new components rapidly, Hill said. And, obviously, automakers can't make vehicles without all the parts.
That means "there might be a ripple effect throughout the industry," Hill said.
"You can't build it with 99 percent of the parts," he said.
Nissan, General Motors and Honda are the biggest customers of Niles America, Patterson said. Reflecting the drop in auto sales, Niles' sales have been cut in about half.
"We're basically in the same position that GM is in," Patterson said. "We have way too much capacity. We had to make decisions to consolidate our operations."
Niles America told its 224 employees in February that it would move its manufacturing operations into Thailand and Japan, where the company is based.
Patterson anticipated that the company would retain 45 to 55 people to work with its overseas factories and ensure quality and delivery.
GECOM, whose primary customer is Nissan, also saw a 50 percent dip in sales because of the recession, a senior manager at the company said in a statement. The company "had to make some difficult decisions regarding consolidation of operations to better utilize resources," wrote Deborah Ybarra, senior manager of organization planning and human resources.
About 44 of GECOM's employees indicated that they would be interested in working in the Frankfort plant if there were openings, Ybarra wrote.
Like Niles America, Ainak will move its work to other company facilities in Indonesia and China, according to a news release from the company. The layoffs will begin at the end of May and continue through October.
Winchester Mayor Ed Burtner said the city is trying to take a comprehensive approach in handling the layoffs and the struggling economy. Some of the city's efforts include attempts to work with community colleges to organize job fairs and pursue companies and developments that would potentially create jobs in Winchester.
"Our philosophy is it doesn't matter if it's one job or 100 or 1,000," Burtner said. "We're going to try to be aggressive and go after what we can."
The economy in Winchester will eventually recover, Burtner said. In the meantime, all there is to do is "hope and pray that the national economy comes back, and we come back with it."