Automotive Industry Ripple Effect in New Hampshire

Many in NH feeling Detroit's pain

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By MICHAEL COUSINEAU
New Hampshire Union Leader Staff 
Sunday, Jun. 7, 2009

New Hampshire lost more than 1,000 auto-related jobs in 2008 -- before many car dealers and parts makers in recent months made even steeper cuts in jobs and workers' hours because people were buying fewer new cars.

Parts maker Freudenberg-NOK is requiring nearly all of its 800 New Hampshire employees to take every Friday off at reduced pay for two months sometime between May and July.

The company's auto-related business is down between 35 percent and 45 percent from a year ago. Its New Hampshire workforce has shrunk from around 1,100 a year ago to 900 at the end of 2008 to about 800 today in Ashland, Bristol, Franklin, Manchester and Northfield.

"It's really driven on whether people buy automobiles," said Greg Keenan, vice president of operations.

About 650 jobs there are tied directly to the auto industry, producing, among other things, urethane parts used in shock absorbers and body mounts to make vehicles ride quieter and smoother.

Heading into this year, there still were more than 900 New Hampshire companies in the auto industry -- from parts makers to car salesmen to retail supply stores -- employing more than 17,000 people, or roughly as many as the entire population of Goffstown.

They represent 1 in every 30 private-sector workers in New Hampshire, according to figures from the state Economic and Labor Market Information Bureau, and their combined 2008 wages totaled $848.7 million -- enough to buy 29,746 new Chrysler Sebring convertibles (at the manufacturer's suggested retail price).

Years of decline

Yearly auto-related job totals have fallen each year since at least 2003.

"What it shows you is there had been a decline in the auto industry even before the current financial crisis," said Anita Josten, a research analyst with the labor bureau.

Bill Hand, owner of Park Nameplate Company in Dover, holds a sheet of Ford emblems. (THOMAS ROY)

This year is looking bleaker for automakers and most anyone associated with the industry.

"The odds are 2 to 1 it will get worse rather than get better nationally, and we'll feel that in New Hampshire in manufacturing and sales," said economist Russ Thibeault, president of Applied Economic Research of Laconia.

Americans last month bought 30.5 percent fewer cars and light trucks than a year earlier.

Last month, Chrysler and General Motors -- both in bankruptcy -- notified thousands of dealers across the country that they were severing ties with them effective as soon as this week for Chrysler and 2010 for GM. Pete McNamara, head of the state auto dealers association, said he has confirmed six targeted Chrysler dealerships and six GM dealers with about 260 combined employees.

Most of the targeted dealerships plan to sell used cars if they can't reverse the minds of auto executives.

Automotive jobs in New Hampshire

The number of New Hampshire workers in jobs related to the automotive industry is on the decline, according to state statistics:

	2003	2004	2005	2006	2007	2008
Manufacturing	7,515	7,078	7,088	7,130	6,841	6,204
Wholesalers	1,949	1,932	1,775	1,780	1,636	1,633
New-car retail	7,471	7,391	7,335	7,125	6,958	6,561
Other auto retail	3,604	3,529	3,542	3,635	3,630	3,621

All sales positions might not be included, if the sales people are not covered by unemployment compensation insurance.

Source: N.H. Department of Employment Security

GM also has tentative deals to sell its Hummer and Saturn brands while lining up prospective buyers to take over Saab, perhaps saving dealerships at least in the short term.

McNamara suspects there could be at least two other GM dealers at risk and has heard that New Hampshire could see its Cadillac franchises drop from nine to one or two, though those affected dealers would stay in business selling other car brands, he said.

Ripple effect

The cutbacks have ramifications that extend well beyond those employed in the auto industry.

Rochester City Manager John Scruton, whose city has two targeted dealers, said car sellers help "support various activities in the community through taxes and donations through the community and through their employees being involved as coaches and volunteers."

And, Scruton said, downsized car dealers with empty buildings could seek tax abatements next year, and if successful, "it means everyone else has to pick up what they've been paying for the tax burden."

Should people need to go elsewhere to buy or service a car, they also might eat and shop in that community, too, he said.

For those making auto parts, there were 14 fewer New Hampshire companies and 1,313 fewer jobs last year compared to 2003, according to state figures. Still, they had a combined payroll of $303.1 million in 2008.

People in the parts-manufacturing sector are relatively well-paid. Their jobs last year paid an average $939.57 per week, compared to $870.48 for private-sector jobs statewide.

Pressure's on

A decrease in new-car sales this year puts more pressure on the approximately 100 auto-parts manufacturers around the state.

"The first couple of months were horrible, and we had to make more adjustments to the business to survive," said William Hand, president of Park Nameplate in Dover.

Along with cuts in holiday and vacation time, most workers saw their weekly hours drop from 40 to 32, while salaried employees took a 10 percent cut.

Hand's 89 employees -- who make, among other things, emblems that go on steering wheels -- represent a little more than half what the workforce looked like in November 2007. About 60 percent of his sales are auto-related.

His business dropped nearly 50 percent during the first three months of 2009 compared to the quarter ending last September, and he doesn't expect a full recovery until at least late 2010.

Hand believes his business already hit bottom and credits Ford Motor Co. with "helping like crazy" with increased orders that he expects will make June the year's best sales month.

Hand's company is even making some GM parts that are being shipped to China, he said, and he hopes to restore workers' hours by September.

Any work restoration would be a welcome -- and unusual -- development in New Hampshire manufacturing, noted Thibeault, the Laconia economist. He said the state has lost about 30,000 manufacturing jobs since 2000.

"One out of three has vaporized," he said. "These are good-paying bread-winner jobs that are difficult to replace.

"We've always had industries in decline in New Hampshire, but usually we've had industries on the upsurge to take its place," he said, citing the shoe industry, computer manufacturing and high-tech boom over the decades.

"We still have industries in decline but nothing to take their place."

http://www.unionleader.com/article.aspx?headline=Many+in+NH+feeling+Detroit's+pain&articleId=abe9de97-8de1-4b67-8a8a-79c9c1389499

Comments

[cold air intake]

interesting post.. The machinery field always has it ups and downs and is always changing but progress will never stop. Even in a questionable economy there is always room for growth and expansion. The will and strength of the people is what makes us all able to move forward and accomplish great feats together and construction has always been the backbone of this country no matter the economic status.

[Swiss recruitment]

An auto mechanic will use his sense of sight to look for obvious physical signs of mechanical problems.

[saan]

thats very big

[Felix Chesterfield]

Has anyone seen this site for GM car and truck parts ? Will they still be open?