By the end of 2009 Ryder will have pulled out of nearly half its automotive operations in Argentina, Brazil, Chile and Europe and severely cut automotive-related activity in North America, putting more than 3,000 jobs on the line.
The logistics and supply chain leader has announced a number of “strategic initiatives” which include discontinuing current operations in Argentina, Brazil and Chile, and “transitioning out of SCS customer contracts in Europe”. Those operations and contracts account for $120m of operating profit with approximately 45 per cent of this derived from the automotive sector, according to the company.
The withdrawal will be handled on a contract-by-contract basis but Ryder would not comment on the companies involved. It did state that the transition process “is expected to result in opportunities for separated Ryder employees to continue serving the same customer under Ryder’s eventual successor.”
In North America the company is issuing temporary layoffs (primarily in the US) to around 1,300 drivers and warehouse workers involved in automotive production contracts. It would not comment on how long these temporary layoffs would last. What is more certain is the permanent elimination of 700 positions in other areas.
“The current economic conditions present a significant challenge for many companies across nearly every industry,” said Ryder Chairman and CEO Greg Swienton. “Although the decisions we’ve made have been difficult, especially in terms of the affected employees and customers, we believe these are necessary and responsible actions to help ensure a strong future for Ryder, its employees, customers and investors.”
Despite the severity of the cuts, Ryder was keen to stress its commitment to the automotive industry. "We have a very strong presence serving the automotive industry which we intend to grow," David Bruce, Vice President of Communications, told Automotive Logistics. "Given the global economic and financial market conditions, we are, however, making a strategic decision to focus efforts, resources and investment in those markets where we have the best ability to deliver the full value of Ryder Supply Chain Solutions relationship."
Further details of Ryder's strategy will be included in the company’s 2009 business plan discussion to be held on February 4.