Ford shutdowns ripple through Louisville-area supplier plants | In-depth

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LOUISVILLE, Ky. (WDRB) — Sara Wells spent her 20s working multiple jobs like restaurant serving, DJing and bartending.

About a decade ago, she got her first “career” job, as a production worker at Martinrea, the heavy stamping plant in Wells’ hometown of Shelbyville, Kentucky.

With decent wages, benefits and overtime, Wells thought she might work 30 years at Martinrea. She saw herself retiring from the plant.

That changed in 2021. As a supplier to Ford Motor Co.’s Louisville Assembly Plant (LAP), Martinrea’s work schedule has been as erratic as Ford’s during the last five months, as the automaker has grappled with the global shortage of computer chips needed for new vehicles.

“It just got very unstable,” said Wells, who recently quit the plant after nine years. “We were laid off, seems like, every other week, with Ford being up and down.”

The roughly 13,000 Ford workers at the automaker’s two Louisville plants aren’t the only ones who have felt the impact of the global semiconductor shortage. The disruptions have rippled through the network of smaller factories throughout the region that supply parts to Ford’s Louisville plants and to other U.S. automakers.

There are 46 auto-parts factories in the Louisville-southern Indiana metro area. Before the COVID-19 pandemic, they employed about 8,000 people earning an average of $54,169 a year, according to the U.S. Bureau of Labor Statistics.

Following the auto boom of the last decade — Ford’s plants reached record employment at the industry peak in 2017 — these smaller supplier plants have also been a growing source of jobs at above-average wages in the region.

Made with Flourish

The 33-year-old Martinrea plant in Shelbyville makes body frames for the Ford Escape SUV, the primary vehicle assembled at LAP.

When LAP goes dark, so does Martinrea, except for a skeleton crew of industrial maintenance workers or employees working for non-LAP customers, according to Wells and other Martinrea employees. (Martinrea International, based in Ontario, Canada, didn’t respond to a request for comment).

Ford executives have said the automaker will cut half of its production in the current quarter because of the semiconductor shortage. LAP has been one of its most affected plants.

Now in its seventh layoff week of 2021, LAP will be shuttered until July 19, the longest down period in recent memory.

Martinrea in Shelbyville — which as of 2018 employed 1,100 people, according to a state database — will also be down to a skeleton crew until mid-July, employees have been told.

For Wells, 39, enough was enough. After nine years at Martinrea and achieving more than $20 an hour in pay, she found a better-paying gig with comparable benefits at a pharmaceutical warehouse, where she started work this week.

She said she’s not the only Martinrea worker who doesn’t plan to wait around without a paycheck for the plant to ramp up once again.

“You can’t be weeks without paychecks and not knowing where you’re going to pay your bills, where you’re going get food and all that,” Well said. “So, a lot of people have been leaving and looking elsewhere.”

Not all of the Louisville-area supplier plants have been crippled by the chip shortage. The amount of downtime depends on the plant’s customer. Those that primarily serve LAP have taken more downtime than those that serve Kentucky Truck Plant, which Ford has mostly kept running and churning out high-margin F-Series Super Duty pickups.

Faurecia Interior Systems in east Louisville, which makes instrument panels for LAP, is also down until July along with Fern Valley Road plant. Magna International in Shepherdsville, which supplies seats to LAP and KTP, has had “rolling layoffs” for about half its workforce.

But plants that aren’t so reliant on LAP — such as, Dana Inc. off Westport Road, which makes drive shafts; Piston Automotive in Jeffersontown, which makes chassis parts; and Dakkota Integrated Systems, which makes bumpers and other assemblies for KTP — have mostly kept running.

That’s according to Tom Williams, a Dana Inc. worker who is also president of UAW Local 3058, which represents workers at Faurecia, Magna, Dana, Piston and Dakkota.

Some local plants are feeling the effect of production shortages elsewhere.

Metalsa in Elizabethtown, for example, produces parts for Ford F-150 trucks made in Dearborn, Michigan and Kansas City and has curtailed production in recent months along with those plants, according to workers there.

The shutdown of supplier plants underscores how automakers have moved to efficient, just-in-time manufacturing, said Kristin Dziczek, senior vice president of the Ann Arbor, Michigan-based Center for Automotive Research.

“They are much more closely tied geographically and temporally to the (primary) production, and when production is down, they are immediately impacted,” Dziczek said. “ … We don’t have giant parts warehouses anymore in this lean production system.”

One key difference is that the supplier plants, while unionized, usually don’t have the union-negotiated benefit called “SUB (supplemental unemployment benefits) pay” that the Detroit automakers provide their employees.

SUB pay replaces a portion of wages not covered by unemployment insurance during layoffs, an incentive for workers to wait on their plants to restart instead of making a permanent change in jobs.

“SUB pay really makes a difference in retaining your workforce,” Dziczek said.

To make up for lost time, auto analysts expect Ford, GM and other automakers to ramp up production later this year or next year when semiconductors become less scarce.

But will workers at plants like Martinrea wait around for the day when Louisville Assembly Plant suddenly needs their products again?

Ford declined to comment.

Jobs that cater to people without college degrees are in high demand. Amazon, UPS and others are offering “signing bonuses” or retention payments, in addition to bumping their hourly rates.

“People do have options to switch to these other employers that still have a lot of job openings, because e-commerce and manufactured goods have a lot of demand right now,” said Sarah Ehresman, director of labor market intelligence at KentuckianaWorks, the Louisville-area workforce investment agency. “And so those employers that are offering good wages, with benefits, with a stable schedule, are really attracting workers away from employers that do not necessarily offer those things.”

Besides the lack of a wage-replacement benefit, Kentucky auto supplier workers face an additional challenge which might prompt them to go find other work: the state’s woeful unemployment insurance system.

While an autoworker might qualify for the maximum checks – more than $800 a week with the federal supplement – many can’t access those benefits because of technical problems with the system, according to Wells, Williams and others.

“It makes me angry,” said Mary Rizer, a worker at Metalsa’s plant in Elizabethtown.

Rizer, 45, said she has been unable to obtain Kentucky unemployment benefits for three bouts of jobless since December.

“At this point, I kind of feel like it’s almost done on purpose to see, ‘Hey, can we get these people to give up?’ I am sure I am not the only who has given up,” she said.

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