Thursday, December 20, 2007

Hard times on way at Johnson Controls

By PAUL HUTCHINGS Staff Reporter

A source close to Johnson Controls Inc. says layoffs may be imminent for the Orangeville automotive parts manufacturer, and employees have posted on an Internet blog that they've been told the plant may close in July, 2009.

The news comes in the wake of the Daimler-Chrysler assembly plant in Brampton, Johnson's only customer, laying off an entire shift.

Gerry Fedchun, president of the Automotive Parts Manufacturing Association, says the company has no choice but to go along with whatever the Brampton assembly plant does because the type of parts Johnson builds are usually ordered on very short notice prior to actually being used.

He pointed out that this is the worst time in more than two decades for the automotive industry, and companies like Johnson Controls really have no choice but to hunt for new business or face failure.

"The (strong Canadian) dollar and the slowness of the US economy are the main factors here," he said.

"I saw the projections for sales in 2008 in the U.S. and they're down from 2007. What that means is you can make enough vehicles in two shifts to supply the demand where before you had to run three shifts. This is really a supply and demand change at this point."

Mr. Fedchun said it's not only the high dollar, but high commodity prices and the fact it is difficult for suppliers to borrow from banks. There are also high energy costs, with oil prices highest they've ever been. "It's pretty grim out there right now."

Johnson Controls now employs 400 people.

No comments: