Business

1,100 auto workers at three GKN Driveline plants in N.C. face cutbacks

Posted December 11, 2008 4:42 p.m. EST
Updated December 11, 2008 8:18 p.m. EST

— Eleven hundred auto workers at three GKN Driveline plants in N.C. face cutbacks

Employees at facilities in Person, Alamance and Lee counties will be affected by fewer work hours and reduced production schedules, the company said Thursday. Temporary and contract workers have already been let go.

GKN, which is part of United Kingdom-based GKN plc, said fluctuating demand for automobiles worldwide triggered the shutdowns.

Luhr Wohlken, director of communications for GKN Driveline Americas, declined to discuss specifics, but acknowledged plants across the company were being affected.

“The state of the global auto industry has caused production schedules from GKN’s customers to change almost every day,” he told WRAL.com.

“Currently, GKN is reducing employee work hours, scheduling holiday production shutdowns and phasing out temporary/contract workers at all its plants worldwide, which includes its operations in North Carolina.”

Information regarding individual plant schedules is not being released for proprietary reasons, he said, adding that “GKN also has non-disclosure agreements with a number of its customers.”

Wohlken said he could not provide a total number of temporary workers at the firm’s N.C. operations. In addition to the three production plants, GKN operates a technical center in Michigan.

Workers were told Thursday that the plant in Roxboro will be closed the weeks of Dec. 22, Jan. 26 and Feb. 23, a longtime employee who attended a staff meeting told WRAL.com. The term “shutdown” was used and the action included all three GKN plants, the worker added.

The company sent an e-mail to the N.C. Employment Security Commission before Thanksgiving with questions about unemployment benefits, according to Larry Parker of the ESC. He said the request only referenced the Alamance County plant, and a meeting did take place.

GKN Driveline touts itself as the “world’s leading manufacturer of automotive driveline components.”

Employees will be eligible for unemployment benefits, but they cloud be ineligible to receive any money for that first week of the shutdown. A one-week waiting period is required before benefits are paid, according to Parker.

The weekly benefit amount is some 60 percent of a person’s pay, with a maximum of $494, he added. How much a worker receives as well as for how long benefits are paid are determined by an individual’s wages and the amount of time a person has worked.

GKN Driveline’s parent firm has been warning since October that the auto industry slump was affecting its business. In October, GKN predicted a 20 percent drop in its annual profit and laid off all temporary workers, according to the Financial Times in London. Some 1,400 people were let go.

On Nov. 14, GKN said demand at its Driveline business unit was expected to be 20 percent lower for November and December. Orders were expected to be 40 percent lower than in the first half of the year, the Financial Times reported.