DELPHI CORP. Local jobs are spared as company cuts back
Packard expects to cut hundreds of jobs next year as workers retire.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- Delphi Corp., one of the region's largest employers, is looking for jobs to cut but apparently will spare the Mahoning Valley --for now.
The parent of Delphi Packard Electric Systems said Wednesday that it will cut 2,800 jobs in the United States and Europe in the next year to boost profits. These cuts will follow the elimination of 3,300 jobs in the first three months of this year and 11,400 last year.
Ann Cornell, a spokeswoman for locally based Packard, said she didn't expect any of the cuts that are coming in the next year to be at Mahoning Valley plants.
Next year, however, will be a different story. The hourly work force is expected to be reduced through attrition, Cornell said.
A labor contract for local workers includes two opportunities next year for hourly workers to retire and receive a $15,000 bonus.
About 1,600 out of Packard's 4,700 hourly workers in this area will be eligible to retire next year. It isn't known how many will retire, but 730 left Packard when the same retirement incentive was offered last year.
Packard has been reducing its local work force for years. It had 8,600 hourly workers in 1985.
Instead of handling the labor-intensive work of assembling wiring harnesses for vehicles, local plants make components because they can be churned out in high volumes by machines.
Reductions in the local work force will continue as Packard refines its lean manufacturing techniques, which are designed to make operations more efficient, Cornell said.
Despite the cuts, Packard has been investing in the operations that are left in the Valley. It is spending about $60 million to build a plastics plant in Vienna after recently spending $42 million to remodel its Cortland plant to accommodate new plastic molding machines.
Delphi also has been reducing its salaried work force. About 1,400 salaried workers, including 650 in North America, accepted an early retirement offer recently.
Cornell said she didn't know how many of Packard's 1,900 salaried workers in the area accepted the offer.
The cuts are the result of constant pressure to reduce operating costs, she said. Shareholders want more profits and customers want price reductions.
Before one-time expenses, Delphi's profit margin in the first quarter was 1.8 percent, which is short of its goal of 5 percent. Delphi employs about 200,000 around the world.