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Manufacturers step on the brakes
Producers say the recession has knocked their wheels off, and the nearest tow is at least a year away.
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The U.S. manufacturing recession steamrollered through the third quarter, setting the stage for one of the worst global recessions in recent history, according to a report released Monday by the Manufacturers Alliance/MAPI, which tracks 27 industries.
"There was a sudden and acute acceleration of the decline in the industrial sector in September and October," said report author Daniel Meckstroth, the trade group's chief economist.
"The vicious circle of financial crisis, decline in wealth, consumer spending cuts and job loss continues to spiral into a severe recession -- certainly the worst since the early 1980s," Meckstroth said.
Manufacturing industrial production dropped 4.4 percent in the second quarter and 7.8 percent in third. The trade group now predicts a decline for the entire industrial sector this year and next before showing some marginal improvement in 2010. The organization expects manufacturing production to fall 1.4 percent in 2008 and 4.2 percent in 2009; production is expected to grow a modest 0.9 percent in 2010.
The report comes as no surprise to scores of struggling manufacturers, who have severely slashed employee ranks in the last few weeks.
Maplewood-based 3M will cut 2,300 workers in the fourth quarter, on top of 1,000 cuts in the third quarter.
AT&T, which announced 4,600 job cuts in April, said Friday that it will lay off 12,000 more. Dow Chemical said Monday that it will close 20 plants and cut 5,000 full-time workers and 6,000 contractor jobs. DuPont is cutting 2,500 jobs, General Motors, 2,000. And Ford continues to lower production and has shut its Ranger truck plant in St. Paul through December because of declining sales, idling about 770 workers.
The downward spiral of the auto industry has sent the chiefs of all three U.S. auto giants to Congress seeking $35 billion in aid.
"The financial crisis in the United States has spread to most other regions of the world, creating a global downturn," Meckstroth said. "A recession among our trading partners has weakened the outlook for exports, which is one of the few remaining pillars providing positive support to the economy, particularly to the manufacturing sector."
Dee DePass • 612-673-7725
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