OEM layoffs signal beginning of 2007 downturn in truck market
December 1, 2006
TORONTO, Ont. - The increased cost associated with the new line of engines developed to meet the US Environmental Protection Agency's 2007 emission requirements has had a trickle down effect on the ma...
TORONTO, Ont. – The increased cost associated with the new line of engines developed to meet the US Environmental Protection Agency’s 2007 emission requirements has had a trickle down effect on the manufacturing workforce.
Engine makers and parts manufacturers have cited the price increase, estimated at about $7,500 to $10,000, as the driving force behind layoffs at a number of different facilities.
The layoffs are the result of an expected market downturn in 2007 resulting from a pre-buy strategy, as trucking companies alter their buying cycles to delay purchasing the more expensive 2007 units.
In Ontario two facilities have felt the pinch already, with the remaining layoffs slated for the spring of 2007.
Navistar’s Chatham, Ont. plant provided a 16-week notice in August for potential layoffs. The Chatham plant is where the International 9000-series of heavy-duty trucks are built, which will include production of International’s new flagship model, the ProStar.
The Sterling Truck plant in St. Thomas, Ont. also resigned itself to eliminating approximately 600 jobs. The first round of job cuts came in September, while the remaining 500 jobs to be eliminated are expected in the spring.
Canadian plants were not exclusive to the downsizing, as Volvo Trucks trimmed its workforce at its Hagerstown, Md. powertrain facility. About 1,770 people work at the Hagerstown engine plant. Volvo officials expect to cut about 600 positions and the changes will be made incrementally during the first six months of 2007.
“While these reductions are necessary for the responsible management of our operations through the downturn, we regret the impact they will have on our employees, their families, and the Washington County community,” said Sten-Ake Aronsson, senior vice-president of Volvo Powertrain North America. “We are committed to working with the affected employees to assist them in this difficult transition.”
Mack as well will be reducing the number of employees at its Macungie, Penn. facility during a six-month span. About 1,040 people currently work at the Macungie plant and the first employee reductions will occur before the end of the year. In total the plant will reduce employment by about 450 positions.
Manufacturers of engine components have also slowed in production. As a result more than half of the employees at Bendix’s Frankfort, Ky. location are slated to be laid off Jan. 2. A total of 125 employees will be laid off with only 95 employees remaining at the facility.
“This difficult decision was not entered into without careful evaluation and consideration, especially for those who will be impacted by the layoffs,” said Michael Paul, Frankfort plant manager.
“We are committed to making every effort to ensure that the needs of the affected employees have been met.”
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