Weakened links

The production workers at manufacturer Weber Automotive Corp. in Summerville had already packaged their handiwork into industrial-sized crates, all ready for shipping.

But those crankshafts, a complicated piece of machinery that hold engine pistons in place, are still sitting idle on the factory floor, awaiting delivery to their next stop in Chrysler's expansive supply chain. Their journey came to a grinding halt after the ailing auto giant filed for bankruptcy protection in late April.

"Our contracts with them weren't good anymore" after that, said Daniel Weber, vice president of privately held Weber Automotive.

Now, the precision-machined product "is just sitting there," Weber said.

A similar scenario is playing out at hundreds of automotive parts suppliers across the country. While the recession has slowed consumer interest in new cars, production at many Chrysler and General Motors Co. assembly lines came to a sudden halt when the two companies filed for bankruptcy separately earlier this spring.

The filings created a domino effect, setting the stage for a series of layoffs, furloughs and temporary plant shutdowns at Lowcountry auto suppliers, including Robert Bosch LLC and Rotorion.

And it deepened the economic hardship felt by the local manufacturing sector, which has already been hit hard by weak demand for consumer goods.

"I don't think our general area understands just how many auto suppliers there are in the area and the revenues ... (the industry) generates," said Carol Vandross, a logistics supervisor for Rotorion.

Both Detroit automakers filed for bankruptcy protection within weeks of each other but with slightly different operational plans.

Chrysler officials stopped its vehicle assembly operations for several weeks immediately after filing April 30. GM, which has already emerged from bankruptcy protection, planned for occasional shutdowns at its various plants throughout the summer.

Big puzzle

At Weber Automotive, the Chrysler bankruptcy meant that contract terms with its largest customer were suddenly negotiable, and the changes were not to the supplier's advantage. The Germany-based manufacturer felt it had little choice but to forgive some volume guarantees and cut the price of its crankshafts on future orders.

"Because of the crisis, we had to have worse terms for us," Weber said. "Otherwise, they would change suppliers."

Weber said the company has had to either lay off or furlough most of its 40 workers since last fall. He hopes to call back a few employees when production starts again in the next few weeks, but not everyone could wait.

"We lost some very good employees, unfortunately," he said.

Production also halted several miles away at Rotorion's Ladson plant, which makes drive shafts for Chrysler and several other companies. Company officials had a hunch that the automaker would stop production during its bankruptcy restructuring, but they were helpless to act on it, Vandross said.

"We had to plan as if they were going to continue," she said.

The company, which has about 150 employees, hasn't had to lay off additional staff since its 100-worker reduction last year. But with far less demand for parts, managers have had to juggle employee schedules to keep as many people as possible both employed and happy, said Tanya Weldon, manager of human resources and administration.

Schedulers are now dividing work hours among staffers with different individual situations. Some can afford to take unpaid time off while others would prefer to file for unemployment benefits. Some need to work enough hours to retain their company benefits. Others had plans for long vacations anyway.

"It's like a big puzzle," Weldon said. "We've had to be really creative."

A fragile state

Robert Bosch's Dorchester Road plant in North Charleston, which also supplies GM and Chrysler, is one of the largest private employers in the Charleston region. Its roughly 1,625 workers produce fuel injectors for both diesel- and gasoline-powered engines.

The local plant has been coping with automotive downturn by cutting jobs through layoffs and employee buyouts, and by scheduling an undisclosed number of shutdown days, said spokeswoman Becky MacDonald.

Cummins Turbo Technologies, which makes turbochargers for diesel engines, recently laid off 32 employees at its North Charleston plant.

Cummins spokesman Mark Land said the cuts were part of the effort to consolidate the company's local operations into its newer Ladson plant, but he added that orders from GM have fallen.

When a manufacturing giant such as Chrysler or GM files for bankruptcy, smaller companies tend to follow suit because their claims might not be fully paid, explained Ann Wilson, senior vice president for government affairs for Washington, D.C.-based Motor & Equipment Manufacturers Association.

"When that happens, it's hard to tell how many of their subsuppliers also get paid," Wilson said. "The whole supply chain is in a fragile state."

In recent months, more than 20 suppliers have filed for bankruptcy, including Visteon Corp., Ford Motor Co.'s largest supplier.

Before the spate of bankruptcies, U.S. automakers had already slowed their production in response to weakening vehicle sales. Wilson said that most plants were operating at about half of their capacity. The association also estimates that South Carolina has lost 1,500 motor-vehicle supplier jobs in the last three years.

Wilson noted that suppliers generate spin-off jobs at their own vendors and through increased spending at places like local grocery stores and gas stations.

"South Carolina needs to pay attention to this because every supplier job creates another 4.8 jobs in the community," she said.

The plight of the small auto component maker has worsened with the tightened credit markets. Many of these companies are typically paid only after a product is delivered, meaning they have to rely on loans during the production phase.

With many banks hesitant to lend, "if there's any kind of substantial ramp up, these suppliers aren't going to be able to respond to it," Wilson said.

On the bright side, the slow times have given the automotive world an opportunity to regroup.

Continental AG recently announced plans to expand a North Carolina brake systems plant it operates near Asheville, which could allow it to add more than 300 workers. The move, executives said, is meant to prepare for when automakers rev up production again.

"We are seeing signs of increased production with our customers in North America," said Kathryn Blackwell, a spokeswoman at Continental's North American tire headquarters in Fort Mill. "It's still an extremely slow market, however, ... We're looking forward to the future."