Milwaukee - Grede Foundries said it will cut about 40 of its 420 St. Cloud workers by Monday.
High fuel prices, a drop in orders and a major automaker supplier's strike are the reasons cited for the cuts.
The St. Cloud plant manufactures iron castings used mostly in the automotive, agricultural and construction industries.
Affected workers — who work in one of the company's molding production lines and supporting operations — will be notified by the end of the week, human resources manager Bruce Cunningham said.
A notice was sent Tuesday to employees informing them of the layoffs. Some of the reasons in the notice were the weakening national economy, high fuel prices, low demand and the strike at American Axle & Manufacturing.
Detroit-based auto parts maker American Axle is undergoing an almost two-month strike of its 3,650 unionized workers. Its effects have trickled down to the automakers and other suppliers, hampering production at General Motors auto manufacturing plants, Cunningham said.
The auto industry provides the St. Cloud plant's major customers.
Those companies have told Grede they are pulling back orders because of slow sales and plan to use current inventory, Cunningham said.
He did not know whether other Grede Foundries plants planned on cutting back their work forces.
The St. Cloud layoffs will reduce one of the plant's molding production lines from three to two shifts, effective Monday. The rest of the line shifts will continue to operate three shifts daily, the employee notice said.
Grede tried to cut costs by reducing the workweek to four days this spring, but other measures needed to be taken to adjust to slow orders, Cunningham said.
He said he hopes employees could be rehired when orders pick up again.
“It's always Grede's first attempt to keep the work force," Cunningham said. “It's a difficult thing for us to do."
Milwaukee-based Grede Foundries employs about 4,000 employees at its eight foundries.
Grede's sales declined 11 percent to $573 million in 2007 from the previous year, according to the company's Web site.