Record layoffs in automotive industry

Although production at the Ford Otosan, Oyak Renault and TofaÅŸ factories in the western city of Bursa restarted Monday, it does not mean Turkey’s automotive industry has managed to weather the crisis.Â

Nearly 56,700 people lost their jobs during last year in Bursa, where many automotive factories are located, including TofaÅŸ, the Turkish manufacturer of cars for Fiat and Oyak Renault, the Turkish car-maker co-owned by Oyak and French Renault. Last year’s layoffs are alarming, said Mehmet Kanca a branch representative of Türk-Ä°ÅŸ, Turkey’s largest labor confederation. Contractions in domestic and external market demand directly mirrored those in employment, he said.Â

Some 6,247 people were laid off in January last year, then another 3,779 people in February. March layoffs totaled 2,968, while April dismissals amounted to 2,656. Nearly 3,259 people lost their jobs in May, then another 3,156 in June. Some 3,329 people lost their jobs in July, while the number of people who were laid off totaled 3,567 in August and 3,376 in September.

During the last three months of the year, there has been a serious increase in layoffs, said Kanca. "We are facing numbers well above our expectations."

"Some 5,683 people were laid off in October, then another 9,283 in November. December layoffs totaled 9,397. Meaning a total of 24,363 people lost their jobs in just three months," he said.

"The total toll of job losses add up to 56,700," he added. "These are very thought provoking and alarming figures."

Aside from the global turmoil, Turkey’s fragility in both economic and social issues continue, said Kanca. "The 2009 outlook does not seem to be any better than 2008," he said. "There is a growing need for an economic program that would protect working peoples’ purchasing power. The program should also weigh-in on investments. That is simply because the demand has come to a halt in both local and external markets. We need to work on reviving the domestic market. In order to do so, private consumption tax and value added tax on vehicles should be abolished or lowered to a minimum. Towing old vehicles and cash purchases of new vehicles should also be facilitated.

"People should be prompted to purchase domestic brands. If we cannot revive the local market, it will be impossible to talk about production," said Kanca, and added there was an urgent need to find a way to end the layoffs.

Re-openings
Meanwhile, Ford Otomotiv, Ford Motor Co.'s unit in Turkey, relaunched its production line. The company suspended production at its Kocaeli factory on Dec 20, sending 6,400 employees on a leave without pay, due to declining demand.

TofaÅŸ, also resumed production on Monday. The company, which suspended production on Dec. 27, only allowed a limited number of employees to carry on duties. TofaÅŸ sent many employees on a leave and paid 76 percent of their salaries during that term.

Oyak Renault, suspended operations on Dec. 18 and sent 4,490 employees on leave, also paying 76 percent of their salaries during the period. Oyak Renault announced operations at its factory would resume in three shifts. The hourly production that used to be 60 units at the factory, dropped to 48, due to a decline in demand.