Job Transfers To Mexico?
More layoffs are planned at Santa Maria’s largest private employer-Zodiac Aerospace who once employed around 2400 in town.In May the French-owned company announced the layoff of 168 workers making seats for the airplane industry.Now according to a second new state WARN notice filed this week another 205 employed at Zodiac Seat Shells US LLC will be laid off permanently as of October 26.
An employee who spoke on condition of anonymity says the international firm’s long term plan is move the division located at 2641 Airpark Dr in Santa Maria to Mexico. A second smaller division that employs around 300 also in Santa Maria is unaffected.
The seat shell facility, subject of the layoffs, had at the beginning of 2016 over 2,400 employees stretched between their storage and production plant in Santa Maria and another plant in Chihuahua Mexico. This company manufactures the primary seat shell for business class seats that are then sent to one of 3 other Zodiac companies for final assembly of the actual seat.
The source says of the 2,400 employees over 1,000 are temporary employees hired from staffing agencies Volt, JSG (Johnson Service Group) Aerotek and a few others. Beginning in March of 2016 Zodiac laid off over 600 of the temporary employees from these suppliers. Then they laid off 168 full time employees from their own payroll beginning in June of 2016 and running through the end of August.
That brings the total lost jobs to near 1000 in this small community.
The source continues that since 2014 Zodiac Seat Shells opened a brand new plant in Chihuahua Mexico to offload permanent manufacturing positions and engineering from Santa Maria to Mexico to reduce cost and to outsource these American jobs. The rate savings for Zodiac is significant as they pay the production employees $3.50 USD, compared to $11/hour in Santa Maria.
Before the latest announcement of the loss of another 205 positions the source wrote that “The layoffs that are posted are just a fraction of what has been done and what is upcoming. The plan in the next 12-18 months is to remove another 600+ employees from Santa Maria by attrition or transferring the work to Mexico.”
Problems arose in the quality of products made in Santa Maria in a time of growing demand says our source. Now the company has lost contracts.
Reuters reported last week that “ Zodiac Aerospace (ZODC.PA) issued the latest in a cluster of profit warnings on Friday, saying its current operating income would fall short of market expectations, while sales for the just-ended financial year would be in line with forecasts.
The French supplier of aircraft interiors, which is recovering from a crisis over delays in aircraft seat production and problems with other equipment such as toilets, said a weak helicopter market had added to pressure from late deliveries.
In a statement, it said 2015-16 current operating profit would be around 10 percent lower than the consensus, for which it cited third-party estimates of 302 million euros to 303 million euros ($336.8 million-$337.9 million.”