Paccar layoff will leave few workers in Renton

Paccar's Kenworth manufacturing plant in Renton will be a shadow of its former self in January, when 430 workers are laid off as the company copes with a major slump in sales of heavy-duty trucks.

Paccar, battered by a 53 percent drop in North American truck sales since 2006, notified the state Employment Security Department of the layoffs Friday.

Once those cuts take effect Jan. 16, only 66 hourly workers will remain, according to a union official.

"It truly is terrible," said Don Hursey, directing business representative of the International Association of Machinists and Aerospace Workers, District Lodge 160.

The cutbacks at Kenworth are among the early signs of a storm that's about to get worse, as the full impact of a global recession spreads across the Puget Sound region, which had been relatively spared.

"We're just seeing the beginning of this downturn," said Yu-Chin Chen, an economics professor at the University of Washington.

Hursey said Paccar will stop building highway heavy-duty trucks in Renton and produce only two off-road trucks a day there. As of last year, the company was producing 18 trucks a day in the facility.

Paccar spokesman Jeff Parietti declined to discuss production figures but said the company plans to "to increase the build rate at the Kenworth Renton plant when market conditions return to normal levels.... We look forward to get employees back to work when the economy recovers."

Heavy-duty-truck sales in the U.S. and Canada are expected to reach only 150,000 this year, down from 176,000 in 2007 and 322,000 in 2006, according to Paccar.

In response, the company is drastically reducing production at the Renton plant.

Hursey said company officials told him production costs in Renton were higher than at the company's other plants in Canada and Ohio.

Officials also told him production won't restart at the plant unless "the market conditions are really good."

"We're probably not going back to work," said one worker about to be laid off.

The Employment Security Department will have four sessions Wednesday at the plant to tell workers about unemployment benefits, job-search classes and other services.

The layoffs are a bad portent for Washington's economy. The loss of high-paying manufacturing jobs creates a ripple effect felt not only by businesses catering to the laid-off workers, but by state finances as well, said David Olson, a UW professor emeritus of political science who specializes in labor issues.

"I think the impact of reductions is going to be immediate and is going to be severe," he said.

Washington's reliance on high-technology and aerospace industries has kept it in relatively good shape compared with the rest of the country, but Paccar's job losses add to the recession's growing toll.

Redmond-based construction-equipment manufacturer Genie Industries announced the layoffs of 475 workers in October. Merck said it would close its Seattle biotech research center next year.

The Employment Security Department's database indicates that in terms of layoffs, three of the five worst months in the past five years have been in 2008.

The bad times are likely to continue through 2009, said the UW's Chen. Normally, when one country slows down, its trading partners pick up the slack, but this time the trouble is global, she said.

"My strong belief is that more layoffs are going to come from local companies," she said.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com