Penske considers laying off 100 workers

By ALLEN ESSEX

VALLEY MORNING STAR

LOS INDIOS - Penske Logistics, a warehousing and shipping company, has notified state officials it may lay off 100 workers in the next 60 to 90 days, a company spokesman said.

"The notice that went to the state (of Texas) is actually just a preparation for a potential layoff. We're not really sure if we have to lay these people off or not," said Randy Ryerson, director of communications for Reading, Pa. - based Penske Logistics.

"It's really based on the forecasts that we're looking at, based on the automotive industry.

"It's kind of a preemptive warning," Ryerson said. "But at the current time, we haven't laid anyone off. We have about 125 people on staff (at Los Indios.) It may include part of them, but I don't know for sure."

Penske's Los Indios operation, started in 2000, involves warehousing and shipping, mainly for Delphi, which has plants in Matamoros and Reynosa, Mexico, Ryerson said. "They make various items for the auto industry," he said.

Delphi makes parts mainly for GM, but also for Chrysler and other automakers, said David Allex, of Allex & Associates International of Harlingen, who works with maquiladora manufacturing operations in Mexico and Texas.

Ryerson said, "It's week-to-week over the next 60 to 90 days," when employment decisions are made by Penske.

"If they do have to go on layoff, we're working with the (Texas) Workforce Commission and Manpower Inc. to help these folks find other work," Ryerson said.

Los Indios Alderman Sal Mendoza said, "It's sad the impact of the economic crisis is hitting so close to home."

It seemed unlikely his town would be exempt from the economic downturn, Mendoza said.

"With an international bridge and an industrial park close by, it was expected," he said.

Allex, a former longtime president of the Harlingen Area Chamber of Commerce, said raw materials for Delphi come in through the Penske warehouse at Los Indios and go into Mexico and finished automotive products are shipped out of Mexico through Penske.

"Penske contracts with other companies to operate what they call a flow warehouse," Allex said.

"They have incoming raw materials that go into Mexico for manufacturing into a finished product, then it comes back into that building in the U.S.," he said. "Then it's flown back out to Detroit or some other manufacturing plant," he said.

But the overall impact of the GM and Chrysler bankruptcies may not have a huge impact in the Rio Grande Valley, Allex said.

"Frankly, I don't think it's going to be that much of an economic impact as most people think it will be, " Allex said of the GM and Chrysler bankruptcies.

Aftermarket manufacturing of auto parts is a growth industry in Mexico, Allex said.

"People, rather than buying a new car, are keeping their old car," Allex said. "They're buying new windshield wipers, they're buying new transmissions, they're buying new light bulbs for their old car. They're going to make it last for another four or five years."

Closing of some local Chrysler and GM dealerships will be a more serious blow to the Valley than any slowdown in maquiladora plants, Allex said.

Mechanics, salespeople and office staff at car dealerships could get pink slips, he said.

"We're losing jobs of local people, not transient people, and that hurts us more than anything else," he said. "We need to keep them working.

"In our local market where we have high unemployment and low per capita income, we can ill afford to lose even one job."

Bill Summers, chief executive officer of the Rio Grande Valley Partnership (formerly Rio Grande Valley Chamber of Commerce), Weslaco, said possible Penske layoffs would damage the Valley economy.

"That's a shame," he said. "I'm shocked. It's hard to make up every job we lose."

Summers said he blames federal government decisions affecting the auto industry with loss of jobs in the Valley.

"I just think what's happened in Washington is hurting the whole country," he said. "This is an example. It's not just 100 people (possibly) losing jobs, but 100 families are losing a breadwinner. ... This never should have happened. The auto industry should not be run by the government."