OGDEN — Autoliv Inc. will cut about 460 jobs over the next year as it transfers automobile air bag material cut-and-sew operations to Mexico.
The cuts are another economic punch to the gut of northern Utah. They follow the loss of about 400 Utah jobs at Autoliv earlier this year and the recent announcement by Roy-based Iomega Corp. that it will trim 415 jobs in the Roy/Ogden area.
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July 26: Autoliv posts net income of 31 per share for quarter
April 19: Autoliv Inc. pumps up sales, but net income dives 62%
Feb. 19: Autoliv's chairman of board will step down at April meeting
Jan. 25: Autoliv's quarterly profit deflates 68%
Jan. 18: Autoliv to trim jobs, blames downturn in airbag market
The job move from Autoliv's 12th Street facility in Ogden to an existing plant in Queretaro, Mexico, will occur during the next 12 to 14 months, according to a company release. The move is part of Autoliv's previously announced cost-efficiency program, which includes the movement of jobs to lower-cost countries, as it deals with a downturn in the auto industry.
Sewing operations will be affected first, starting in September. After the cuts are completed, only about 40 people will be at the Ogden facility in nonproduction jobs in research and development, marketing, prototyping and purchasing.
"Over the course of the year, given some growth we're seeing in some of our other operations and normal attrition and turnover, we may be able to offer some jobs to folks," said Roger Tea, vice president of human resources. "For others, we will have an outplacement and severance program in place."
The company employs about 4,500 people in northern Utah as part of U.S. operations with about 6,000 workers.
Autoliv has two other large factories in Ogden, plus facilities in Tremonton, Promontory and Brigham City in Box Elder County. The plants produce modules, inflators and initiators for air bags.
A little more than a year ago, the company moved part of the cut-and-sew operations from 12th Street to Mexico, involving about 100 jobs, although most of the effected workers in Ogden found work elsewhere in the company.
In January and February, Autoliv had a job reduction affecting about 400 Utahns involved in staff support and engineering.
The cuts announced Thursday represent about 10 percent of the existing Utah work force. It is the largest reduction for the company in Utah since June 1995, when between 600 and 650 workers were let go in a cost-cutting move that also affected a technical center in Detroit.
"Timing is everything, and unfortunately, this has been a really difficult situation for us," Tea said. "Our future is directly dependent upon automobile sales, and there has been a general retrenchment among consumers."
Sweden-based Autoliv has nearly 80 facilities and about 26,000 workers worldwide. Sales last year totaled $4.1 billion, when the company had net income of $170 million. Net income in the second quarter was $30 million. Most of the company's U.S. manufacturing takes place in Utah, but some takes place in Colorado, Indiana and Kentucky.
The company has three Mexico plants. In addition to the one in Queretaro, seat belts are made at a plant near Mexico City and a factory acquired about a year ago in Tijuana.
"In our industry, we're probably the last company that manufactures seat belts in the U.S.," Tea said. "We do it in two factories in the U.S. And we're one of the last doing the woven bags here. Most of our competitors have gone overseas or into Mexico over labor issues."
Ogden Mayor Matthew Godfrey said he is optimistic that the laid-off Autoliv workers will be able to find employment elsewhere in the city. Among growing companies that will need workers are Fresenius Medical Care, a kidney dialysis filter maker adding about 1,000 jobs in Ogden over the next year, and jet engine maker Williams International, which will start adding about 200 jobs in the next 12 months. Hill Air Force Base also will will need hundreds of engineers in the next few years, he said.
"Overall, we're still way up in numbers," Godfrey said. "I think most of the workers will be able to transition into other positions. We'll see some companies laying people off but also more jobs coming on."
Companies dependent upon economic trends — such as Iomega and Autoliv — sometimes tend to have major job actions at nearly the same time, he said.
"Big manufacturers are that way. But a big part of our economic base is not driven directly by the economy, and that will stay steady or see expansion," Godfrey said.
In a prepared statement, Autoliv's chief executive officer, Lars Westerberg, noted that air bag cushion cut-and-sew operations are highly labor-intensive.
"We can therefore reduce manufacturing costs for this process by relocating to our Queretaro facility," he said. "In Europe, we have already started to move this kind of production to Poland from Holland and other high-cost countries."
Autoliv's stock price was at $20.99 early Thursday, down 2 cents from Wednesday's close. In the past year, it has ranged from $14.10 to $25.
E-mail: bwallace@desnews.com