Manufacturing company makes massive job cuts
Decreased demand for SUVs and large trucks has had ripple effects on the auto industry, and consequentially the manufacturing industry.
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Eaton Corp., an industrial parts and systems maker, announced that it is cutting 5,200 jobs. Paired with cuts last year of about 3,400, the company has cut about 10 percent of its work force.
Eaton says the cuts are due to decreased demand for its products. The manufacturing industry as a whole took a huge hit last year. The manufacturing index hit a 28-year low.
Connecting the dots
The auto industry is in dire straights and has asked the government for a bailout as big-name companies lose profits and workers. The demand for automobiles has greatly diminished and companies lost money on SUVs and trucks when gas prices skyrocketed over the summer.
The auto industry is one of Eaton’s biggest clients, specifically trucks. As the auto industry suffers, Eaton manufacturing is taking a hit, too. The overall downfall in the manufacturing sector is related to the troubles in the auto industry as well as the housing industry.
On a local level
President Barack Obama’s home state, Illinois, ranks fourth among states in terms of manufacturing jobs. Between November 2007 and November 2008 the state lost more that 20,000 manufacturing jobs.
Industrial employment in the state dropped 2.1 percent. Nearly 1 million of the state’s residents are employed in the manufacturing industry. Some manufacturing jobs don’t pay very well, but at least employed workers have the option of getting a payday loan when times get tight.
Besting Circuit City; more changes in the job market
In the wake of electronic retail giant Circuit City announcing it will liquidate its assets and close its doors, its main competitor is undergoing a change of leadership. Best Buy Chief Executive Brad Anderson will retire this summer, and Brian Dunn will take over his post.
Though Best Buy saw lower-than-expected profits during the holidays, the company has managed to stay healthy and viable as Circuit City went bankrupt and finally decided to go out of business. Anderson says his strategy was to focus on customer types rather than products.
The invisible hand
In the case of Circuit City and Best Buy, the recession seems to be forcing the free market into a sort of Darwinian pattern as only the strongest companies survive. Another rivalry to keep an eye on is the one going on between Apple computer company and companies making Netbooks. Netbooks are small, cheap laptops.
Apple has long been a trend setter in the electronics industry. With iPhones, iPods and iBooks, it gained a huge following of technophiles who always needed the newest thing. But those types of customers are becoming replaced with a new kind of consumer — the kind whose main goal is to save money. Netbooks, by manufacturers such as eMachines, can cost as little as $250. Apple’s least expensive notebook computer retails for $999.
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Adam smith and the invisible hand theory very interesting to bring up in the battle between circuit city and best buy. I really enjoy the fact that you would bring this up when one of Adam Smith’s principle things was the fact that each individual decides the best interest for themselves and these are corporations that have many people that don’t do what they believe is right for their self interest.
We really need to get the auto industry up and running – quick. Our country cannot afford to lose something that affects our economy is such a huge way. The economy is at its worse and losing more manufacturing jobs will only result in something far more catastrophic. Many of these jobs are moving overseas to places like Mexico and China, leaving a very limited option for the American workers.