Business

Auto woes hit state hard

General Motors and Ford may grab the headlines when the auto industry is suffering, but the suppliers to their assembly plants, including a network spread across towns large and small in Kentucky, are suffering, too.

Dana Corp., which has a plant in Danville, recently emerged from bankruptcy. Johnson Controls, which operates in Georgetown and elsewhere, is undergoing a restructuring and has laid off more than 200 Kentuckians this year.

Since July 2007, a Lexington-based group that assists laid-off employees has helped nearly 550 workers laid off from area auto suppliers.

Just in Central Kentucky, there have been eight major layoffs at suppliers.

"People are very concerned, as am I, for the short term especially," said Frankfort Mayor William May, whose city has lost more than 350 auto supplier jobs since the middle of last year.

One who lost his job was Nathan Moore, who handled materials at Topy America, which manufactures wheels.

"It kind of came out of nowhere," Moore said. "Our production and quality had been picking up over the last year, so I didn't see it coming."

But overseas competition was too much for the Topy plant, which cut its aluminium wheel production and focused on its steel wheels.

Earlier this year, higher gas prices hurt carmakers, especially those making trucks, such as the Ford plant in Louisville. Now the weakening economy and tight credit markets are making it harder to sell any new vehicle.

And Kentucky is primed to suffer its share of the pain. A 2007 study by the Center for Automotive Research ranked Kentucky sixth in the nation in auto industry employment with more than 35,000 people working at automakers or suppliers.

Although there are no figures specifically for the auto industry, unemployment in manufacturing is up in Kentucky. In August, more than 10,500 former manufacturing workers were receiving unemployment benefits, up from just more than 9,000 a year earlier.

Manufacturing employment as a whole in Kentucky numbered 245,300 in August, according to the state Office of Employment and Training. That's down 6.3 percent from two years earlier.

"Right now, the times are scary for the automobile industry," said Becky Payton, who was laid off last November from Dana.

She called the day of her layoff "the most emotional day I've ever had."

While the struggles aren't over, there is hope. She and Moore are among many former auto industry employees using government assistance programs to go back to school and learn new skills.

Payton is enrolled in a practical nursing program at Bluegrass Community and Technical College's Danville campus, while Moore is becoming an industrial electrician at the Lexington campus.

Both started by seeking the help of the Bluegrass Area Development District, which administers the federal assistance programs locally.

Those employees work with people like Payton to determine whether their skills lend themselves to finding a new job quickly or if they should be retrained.

"And if so, we can pay for some of it, or in some cases, all of it," said Lori Collins, director of work force programs.

The first program is the Workforce Investment Act, which pays up to $2,750 per semester for people to go back to school.

But the far more lucrative program, based on a 1972 federal trade act, allows manufacturing employees laid off because their job was moved overseas to receive unemployment benefits for up to two years, as well as full reimbursement for two years of retraining in school.

Both Payton and Moore qualified for the two years of assistance.

"It's been a big adjustment having to go back and start studying, hitting the books, when I'm not used to that," said Payton, 30. "It's been a big change for me and the family. The boys find it interesting that I'm studying with them."

She and her husband, Greg, and their three children are surviving on just his pay at the Wausau Paper plant in Harrodsburg plus her unemployment. She won't graduate until December 2009.

"And the cost of gas now and groceries has not helped much," she said.

But the prospect of an in-demand job helps Payton, who was forced to sell her new crossover SUV after being laid off from Dana.

"I'm kind of glad I'm able to be in the field of nursing. I know that's something that's going to be stable and always be around compared to the factories," she said.

Before she became a fill-in line leader at Dana, she had worked a few times at a Harrodsburg nursing home.

"It was something I kept going back to but never had the time or money to go forward with with three kids," she said.

But after she was laid off, she found a card her grandmother, who passed away several years ago, had written to her "that said she was proud of me for doing the job of a nurse."

"That encouraged me to go forward," Payton said. "Everything happens for a reason."

Before being laid off, Moore, a six-year Topy America employee, had been interested in learning new skills.

"This really put the boot in my rear to go do it," he said.

So now Moore, 25, is learning to repair and program machinery.

And while things are tight, as a single man, he's "one of the more fortunate," he says.

"I made some drastic cuts in my McDonald's budget," he joked. "I don't have health insurance, but that was my choice."

And after he graduates in a year, he'll be in a field that could pay him around $25 hourly, better than the $17 wage he made at Topy.

And while the auto industry is hurting, the state hasn't given up on luring more automotive companies, nor has the work force assistance group.

Collins said many laid-off workers are encouraged to continue looking at manufacturing.

"For every company that's laying people off, there are manufacturers that are doing hiring," she said. "In some cases — your construction trades, your welding, your plumbing, HVAC and that sort of thing — are high-demand."

May, the Frankfort mayor, said a Japanese manufacturer will be in town Monday to look at an industrial site for a potential location.

"Some companies are struggling while others are expanding," May said, "and if we can continue being aggressive in our recruitment ... then our folks will be better off."

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