Autoliv layoffs hit Utah

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Automotive air bag manufacturer Autoliv, one of the largest employers in the state, has laid off 250 Utah workers within the past two weeks as it struggles to deal with the sharp downturn in the auto industry and the nation's economy.

Autoliv spokeswoman Kathy Whitehead said the layoffs represented about 7 percent of the company's Utah work force.

"It was something that we were very reluctant to do, but still had to face as a company," she said. "We continue to hope the market forecasts that indicate the economy will be strengthening by the end of the year will be right."

Whitehead said that slightly more than half of those laid off accepted a voluntary severance package. She said Autoliv also is using furloughs to adjust its work force to the company's production demands.

"Some of the furloughs are for a week at a time, while others are for up to 90 days," she said, indicating that 150 to 200 employees are on furlough this week.

Autoliv has five plants in Utah. There are two plants in Ogden and one each in Promontory, Tremonton and Brigham City. Collectively, they employ about 3,300 workers. Autoliv's worldwide work force numbers about 37,500.

"It is disappointing to hear about the layoffs," said Kevin Hamilton, community development director for Box Elder County, the site of three of Autoliv's Utah plants. "Given the current economic environment, though, it is understandable."

The maker of auto-safety systems indicated in early July that it intended to cut up to 3,000 positions, then about 7 percent of its worldwide workforce of 43,000 employees, in a restructuring plan that eventually would impact its employment levels in Utah.

Those cuts, however, turned out to be deeper than anticipated, with Autoliv indicating two weeks ago that companywide it ended up slashing its head count by 5,900 employees, or nearly 14 percent.

The Stockholm-based company said the restructuring program, which is expected to generate pretax savings of $120 million annually starting in 2010, was needed to mitigate the effects of production cuts by its customers that include General Motors, Chrysler and Ford.

All told, those three struggling domestic automobile makers account for 40 percent of Autoliv's business. Foreign manufacturers, including Toyota and Honda, generate much of the remaining volume.

Autoliv two weeks ago reported sales in its fourth quarter ended Dec. 31 declined 33 percent, to $1.2 billion, compared with the same period a year ago, resulting in a loss of $39.1 million. It went on to project that its sales in the first quarter of 2009 will drop more than 45 percent.

Although the layoffs at Autoliv's plants represented a blow to the economy in Box Elder County, Hamilton pointed out that Procter & Gamble is continuing to move forward with the construction of its planned manufacturing-distribution facility near Tremonton.

When it opens in 2010, that facility is expected to initially employ 250 to 300 Utahns, who will be engaged in the manufacture of paper products that include the company's Bounty and Charmin brands.

"In that light, we consider ourselves a lot more fortunate than many other areas," Hamilton said.

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