Losing 800 jobs hurts

The Oregonian reports today on layoffs at Freightliner – 800 good heavy manufacturing jobs disappearing from Swan Island. Interesting post on Indymedia predicting major reorganization, on September 18, 2006 (some of the comments are interesting, too, before they descend into squabbling). Freightliner has been one of the top ten private companies in the region in terms of number of employees, so cutting almost half their workforce is a significant blow to Portland’s economy.

Brent Hunsberger’s article today notes that in the past, Portland has pulled Freightliner jobs from Canada, and now two new plants in Mexico are taking them from here. I was wondering whether the North American Free Trade Agreement (NAFTA) is helping or hurting American workers… and the first Google reference under “Freightliner Mexico NAFTA” is “Industry source wonders about NAFTA decision” – a 2001 article in the Portland Business Journal, about compensation to workers after layoffs following construction of Freightliner’s first plant in Mexico. Now they’re building another, with more loss of Portland jobs. Hmm, seems to be a pattern emerging.

I’m not going to dig into NAFTA again here – you can read my research on its effect on corn exports. Corn, trucks … NAFTA affects a wide range of products, and many, many workers. The NW Labor Press reported 1/19/07 that Freightliner denies the plants in Mexico are forcing the layoffs. A company press release instead blamed new EPA regulations, claiming they add $10,000 to the cost of a truck while reducing pollutants from diesel engines. The NW Labor Press confirmed this with union representative Joe Kear, but added, “‘They can build trucks cheaper in Mexico,’ he said.”

There’s no reference in today’s Oregonian article to the $850m judgment against Freightliner handed down by a jury in December, again reported by the Portland Business Journal. The award stems from alleged fraud connected with the Western Star subsidiary. Freightliner is appealing the jury’s decision. Still, having a potential liability of $850m hanging over the company might affect hiring and firing decisions.