The Cost of Hyundai's Decision to Shut Down Ten Days - WSFA.com Montgomery Alabama news.

The Cost of Hyundai's Decision to Shut Down Ten Days

Bad news for thousands of workers at Hyundai and several Montgomery area Tier One and Tier Two suppliers.

The carmaker announced it is sending workers home for seven more days in the next three months because of slow sales.

The news comes days after the company first told workers they would go home for three Fridays in October.

Hyundai passed the news to its employees Monday night; workers will stay home a total of ten days between last Friday and the end of the year. One economist says it's a fact of automotive life.

"The automobile industry has always been cyclical, always after the housing, and it would be the first one to get impacted," said Auburn Montgomery economist Keivan Deravi.

It may be normal, but also painful.

Average pay at Hyundai is sixteen dollars an hour, which means workers will lose $128 a day, times ten, a loss of  $1280 per worker.

The down days will affect about 3000 employees, add it all up and the hit could take up to three point eight million dollars from the local economy.

"Employees do have two weeks or more of vacation per year plus three personal days, depending on if they've used those days, that would help offset any of the idle days," said Hyundai spokesman Robert Burns.

The company also points out many workers got several days of overtime earlier this year, which should also help.

"It certainly makes it possible for the employees are almost whole for the year," Burns said.

But economist Deravi says it doesn't always work that way.

"It's not like we're that rational human being who says we made more then, so let's save some for later on," Deravi said. 

The first economic numbers don't take into account possible down days at Hyundai's Tier One and Two suppliers.

Mobis Alabama employs 875 workers; Smart Alabama, 700; SL Alabama has 400 workers on the rolls, with nearly as many at Hwashin America and Mando Corporation.

Those companies also produce parts for other carmakers, so no one can tell yet how much a hit Hyundai's shut down will cost their employees. Meanwhile, Hyundai says it could change the schedule again to increase or decrease the down days.

Deravi says in light of that, people should keep their wits about them.

"This is the pain of the industry," he said. "With the good comes the bad, and with the bad comes the ugly, and this is the ugly side of this industry."

Deravi says if there's a silver lining, it's that most people have already budgeted for the necessities like paying for their homes and cars, and because of that, we probably won't see a bigger effect on the local economy.

Deravi also says when the national economy also perks up, people will make another optional decision - to buy new cars - and that should also help Hyundai.

One of Hyundai's biggest Tier One companies expects to take a minimal hit because of the shut downs. Glovis processes the cars Hyundai builds next door.

Company representatives say because it has a good stock on hand, it probably won't have to cut any schedules at all. The company employs about 700 people.

Reporter: Chris Holmes

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