Manufacturers and other businesses continue to slash production and payrolls to survive tough times. In 2008, the United States economy lost 3 million jobs, and 600,000 more in the last month alone.

The speed and scale of the recent layoffs have been staggering, but heavy industry in particular has hemorrhaged jobs.

In the span of one week in January, plane maker The Boeing Company announced plans to cut 6 percent of its workforce, Detroit automaker General Motors Corp. announced thousands of job cuts at plants in Michigan and Ohio, aluminum producer Alcoa laid off 13,500 workers and European steel giant Corus said it would cut 3,500 jobs around the world, "with 2,500 jobs going in Britain alone." The barrage of negative employment news followed recent layoff announcements from Deer & Co. and Harley-Davidson, among others.

In most cases, the cutbacks reflects a bleak 2009 outlook for national economies stricken by severe downturns across the globe.

The International Labour Organization (ILO) announced in late January that, under its most optimistic scenario, 2009 could end with 18 million more unemployed people than at the end of 2007, with a global unemployment rate of 6.1 percent, if the economic slowdown that has turned into a global employment crisis continues. Under its worst-case economic scenario, the United Nations agency said 51 million more jobs could be lost by the end of this year, creating a 7.1 percent global unemployment rate.

More realistically, the ILO's recent Global Employment Trends report said 30 million more people could lose their jobs if financial turmoil persists through 2009, pushing up the world's unemployment to 6.5 percent, compared to 6.0 percent in 2008 and 5.7 percent in 2007.

Several concerns arise from the idea that major industrial giants could be in for further massive restructurings. Among them: that countries' investments in their respective national economies and job-creation initiatives will be for naught.

"What's crucial is whether the stimulus packages around the world are gaining traction," Quincy Krosby, chief investment strategist with investment and insurance company The Hartford recently told TheStreet.com. "At some point they will kick in. But until it gets to [that] stage, companies are going to keep cutting costs."

China, the world's third-largest economy after the U.S. and Japan, is one of the only major economies still growing, though its growth slowed sharply in the past year. The government says about 20 million migrants have lost their jobs and leaders worry about possible unrest.

The Chinese government has already announced a stimulus package aimed mainly at boosting spending on infrastructure and construction. In November, China unveiled a 4 trillion yuan ($586 billion) stimulus package composed of infrastructure projects and other spending to shield itself from the global slowdown.

"Currently, 1 percent of the stimulus is allocated to health care and education spending and 7 percent to public housing, with the rest going to corporate subsidies and infrastructure," according to the Wall Street Journal yesterday (via The Australian).

"The plan calls for spurring domestic consumption by pumping money into the economy through higher spending on public works," the Associated Press says. "State companies have been ordered to speed up plans to build power plants and other facilities."

Though the plan's effects are not expected to be felt for several months, Chinese Premier Wen Jiabao on Sunday cited strong growth in consumption and bank loans in January as evidence that the economic situation has started to improve.

In the U.S., President Barack Obama signed into law his $787 billion economic stimulus package — one of the most costly pieces of legislation in U.S. history — to resuscitate the nation's failing economy.

Among the key aims of the new law: to create or save 3.5 million jobs nationwide, many for modernizing transportation and infrastructure.

"New construction projects could not only create jobs, but also help counter the decline in machinery sales from the pronounced drop in commercial, residential and infrastructure construction. Some analysts have argued, however, that the amounts discussed in the stimulus plan won't lift sales measurably for major U.S. equipment makers such as Caterpillar and Terax Corporation, and may instead benefit sellers of lower-priced used machinery," according to Weekly Corporate Growth Report (via AllBusiness.com) last month. "The market for new heavy industrial equipment sees significant competition from companies selling off their used equipment assets."

Like the Chinese plan, part of the new $787 billion economic stimulus plan has been allocated specifically to infrastructure and transportation projects, including:

• $27.5 billion for highway and bridge construction and repair;
• $8.4 billion for mass transit;
• $8 billion for construction of high-speed railways and $1.3 billion for Amtrak;
• $4.6 billion for the Army Corps of Engineers;
• $4 billion for public housing improvements;
• $6 billion for clean and drinking water projects;
• $7.2 billion to bring broadband Internet service to under-served areas; and
• $4.2 billion to repair and modernize Defense Department facilities.

During the January week of gushing job losses, heavy-equipment maker Caterpillar Inc. announced tens of thousands of layoffs.

"[T]he news that Caterpillar is cutting 11,500 jobs from its payroll, and another 8,000 from independent contractors, is confirmation — as if anybody needed it — that the global boom has convulsed into a global recession that continues to widen and deepen," Fortune noted in January. "But as painful as the cuts may [be] in the short term, they could make Caterpillar healthier in the long run."

Once this downturn turns around, more will be made using fewer people. If surviving manufacturers can effectively adapt lean production throughout their entire supply chain, experts say, they have a much greater chance of emerging from this recession as more efficient, more profitable and more successful.

Resources

Global Employment Trends Report 2009
The International Labour Organization, Jan. 28, 2009

Unemployment, Working Poor and Vulnerable Employment to Increase Dramatically...
The International Labour Organization, Jan. 28, 2009

As Heavy Industry Pulls Back, Layoffs Pile Up
by Robert Holmes
The Street, Jan. 28, 2009

China Targets Economic Stimulus
by Andrew Batson
The Wall Street Journal / The Australian, March 2, 2009

Premier Wen Warns Economic Crisis Still Spreading in China; Says Recovering will be Arduous
The Associated Press, March 1, 2009

China's Wen: Economic Stimulus Measures Have Had Some Effect
Dow Jones Business News, March 1, 2009

Signed, Sealed, Delivered: ARRA
WhiteHouse.gov, Feb. 17, 2009

Highlights of $787 Billion Stimulus Plan
The Associated Press, Feb. 17, 2009

Valuation of the Industrial Machinery Industry
by Andrew Dolbeck
Weekly Corporate Growth Report / Allbusiness.com, Feb. 2, 2009

Lean Times: What Caterpillar can Learn
by Alex Taylor III
Fortune, Jan. 26, 2009