STEVE INSKEEP, Host:
Exports from American manufacturers were surging until now.
M: The depths of the decline that we're seeing right now is extreme, and manufacturing production is falling exceptionally fast.
INSKEEP: That's Nigel Gault, an economist with IHS Global Insight. And he says many manufacturers are cutting deeply into their most valuable asset, their workforce. Frank Morris of member station KCUR in Kansas City reports.
FRANK MORRIS: This time two years ago, the market for big, over-the-road trucks was strong, and the Haldex plant near Kansas City which makes brake parts for these trucks had to pedal to the metal.
(SOUNDBITE OF MANUFACTURING)
MORRIS: The plant is a maze of automated milling machines and assembly lines, all coded with a thin patina of grime and heavy use. Jay Longbottom, the guy in charge of this part of the company, says back in the day, he couldn't tolerate a minute of downtime.
M: I really remember that frustration of, what do we need to do to drive this faster? What do we need to do to get these machines up to full production? We need this output desperately.
MORRIS: Then, orders screeched to a stop.
(SOUNDBITE OF SCREECHING MOTORS)
MORRIS: So did the machines. The plant's not producing half of what it did two years ago. And while Longbottom used to scramble to get parts in time, now, he's delighted to see supplies start to run low.
M: It's a big part - a huge part of coping with things right now is bringing your inventories down and to generate the cash flows to come through this.
MORRIS: Longbottom's cut staff too by almost a third and trimmed hours for the rest. The survivors are mostly quick, analytically-minded detail freaks who run high-tech machinery. Skilled factory workers like these are desperately hard to come by. Employers hate to see them go. But facing the biggest downturn in modern history, many are just out of options.
M: This is a total interruption of demand, so people take fairly drastic actions to try and make sure that they survive.
MORRIS: That's Norbert J. Ore, the guy who writes the Institute for Supply Management monthly report on business. He says the plunge in orders last month forced manufacturers to cut production fast. They responded with the biggest job cuts in more than a quarter century. But then there's Bob Bundschuh.
(SOUNDBITE OF HEAVY MACHINERY)
MORRIS: Bundschuh's company, Pretech, hasn't laid anyone off yet.
M: We talked to the guys, and they would much rather work less hours but keep their job than have to pick four or five people to let go.
(SOUNDBITE OF HEAVY MACHINERY)
MORRIS: The floor shakes as a huge machine rattles and squeezes a freshly cast section of concrete pipe big enough to hide a small family. Pretech here in Kansas City, Kansas makes storm sewers as well as concrete utility boxes and manholes. That business collapsed last summer when builders stopped putting in new subdivisions. But Bundschuh says he's holding on for the federal stimulus package.
M: One of the first things you do in any building is you put in the sewers. We're in before the roads are in.
MORRIS: Bundschuh expects his business to pick up by spring. Most economists aren't so optimistic. Jay Longbottom, the brake part manufacturer, says U.S. industry is in for a long, uncertain recovery, and he fears that a lost generation of highly skilled factory workers may prove impossible to replace. For NPR News, I'm Frank Morris in Kansas City.