Grede Foundries announced Wednesday that it is laying off approximately 140 employees at its Reedsburg plant, which is nearly 25 percent of its workforce.

Two cuts of about 25 employees and an additional 90 employees were laid off at the Reedsburg plant during the spring and summer of 2008, respectively. The plant came into 2008 as the second-largest public employer in Sauk County at 865, behind only Lands' End.

The company blamed the layoffs on the "dramatic economic recession," especially the segments being served by Grede, the automotive industry and lawn and garden market.

"Our main customers are General Motors, Chrysler, Ford, Honda and Toyota," Dale Herritz, interim manager of the Reedsburg plant, said. As these companies continue to struggle, the demand for products manufactured by foundries has diminished.

Grede produces a wide array of car parts, but the Reedsburg location deals primarily with ductile iron castings, which are used for

piping, brake, drive-train and suspension components.

In order to remain operational at all, top management at the Reedsburg plant and the corporate office made the decision to cut its workforce considerably. Herritz said the discussions started about a week ago, but a final decision was not made until early this week. Layoffs have already begun and are expected to continue throughout the week.

"We're going through that process as we speak," Herritz said. "It certainly takes some time. It's a process that's not fun and takes some time to get through."

Due to the intimate relationship between the foundry and the automotive industry, the cuts should not come as a big surprise to employees, Herritz said.

"Anybody that wasn't fearful that it (the layoff) was coming hasn't been watching TV or keeping up with auto sales," he said.

As sales of automakers plummet, industries like Grede have been struggling to make a profit. Grede has reported deficits in recent years, including the loss of $47.4 million in the 2007 fiscal year according to the Milwaukee Journal Sentinel.

The plant, which has always required three shifts to operate due to the nature of its operations, will be down to only one shift beginning next Monday.

Herritz said he remains optimistic the plant will be able to maintain at that capacity, but had no comment about the future.

Because the cuts are temporary, there remains a possibility that those who have been let go during this layoff might return to the plant in the future.

Herritz said he would like to see everyone back, as the employees are the most important part of the operation.

"We'd like to hire them back as soon as business conditions improve and return to a full operation at Grede Reedsburg," he said. "Our biggest concern is for the welfare of the employees. Hopefully they'll be all right and we'll get them back."

All terminated employees could potentially receive some type of severance package since they are not unionized, but Herritz declined comment on what kind of package, if any, they would get.

The plant has been careful in trying to not alienate any of the employees, even those being let go. Herritz said things could be worse at the plant than they are.

"Overall, I'd say the climate (in the plant) has been very good, all things considered," he said. "I'm hoping we've seen the bottom and have nowhere to go but up."

Herritz said Grede's Reedsburg plant has not been the only one affected by the declining automotive industry. Competing foundries have endured a lot of the pain also.

"Every foundry in the United States in the automotive industry has experienced some kind of layoffs and loss," Herritz said.

Karna Hanna, executive director of the Sauk County Development Corporation, agreed many in the automotive field have struggled.

"It's safe to say the businesses that are most impacted immediately in Sauk County are ones in the automotive industry, like Grede," Hanna said.

Flambeau Inc. of Baraboo, another company that works closely with the automotive industry, has already announced it is looking to lay off about 50 employees or nearly 10 percent of its workforce.

She said there will be a ripple effect that could take place in Sauk County as the result of such a large cut. That could impact companies that have no clear ties to the auto industry.

As massive layoffs continue to impact people directly, Hanna said the implications are that those people will then be less willing to purchase high-priced goods or large quantities of goods, hurting retail businesses among others.

Based on the recent cuts, Hanna said the SCDC is looking to help out those newly unemployed workers. "We are partnering with the Workforce Board to put together a rapid response program to help those who have been laid off," she said.

Hanna said the diversity of Sauk County's workforce will allow it to remain stable into the coming year.

"Not all companies are having a real difficult time right now," she said. "Some are continuing to grow... and that's the good news."