News

Layoffs impact Manitowoc plant in Franklin County

Written by Jim Hook/Chambersburg Public Opinion | Oct 25, 2016 7:55 AM
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Manitowoc Company, located off Pa. 16 in Shady Grove, will move its crawler crane manufacturing operations from Manitowoc to Shady Grove, east of Greencastle, according to a press release from the company. (Photo: Markell DeLoatch, Public Opinion)

(Shady Grove) -- Manitowoc Cranes, the parent company of Grove U.S. in Franklin County, has announced unspecified layoffs.

Any local layoffs would cut into the additional jobs anticipated with the relocation of Manitowoc's crawler crane manufacturing operations from Wisconsin to Shady Grove. Manitowoc announced in August that the move would create 250 local jobs.

Manitowoc remains "firmly committed" to the move, according to L. Michael Ross, president of the Franklin County Area Development Corporation.

"As market conditions improve those who were recently impacted by the layoff will be called back, and there'll be more hiring in the first and second quarter," he said.

Company officials did not confirm local layoffs reported by employees at the Shady Grove plant. They did not respond to emails or telephone calls.

Manitowoc announced on Thursday that it was shutting down some mobile crane production lines. The Shady Grove plant makes mobile cranes and last year began preparing for crawler crane manufacturing. The plant had employed about 900 people in August.

Barry Pennypacker, Manitowoc president & CEO, also announced on Thursday that the company was accelerating the crawler-crane move. Manitowoc previously indicated it would finish the move by mid-2017.

The Wisconsin Department of Workforce Development said 538 jobs would be lost at the union shop in Manitowoc.

The company updated its situation in preparation for the release of its most recent quarterly financial report.

"Orders and backlog for the company declined double digits during the third quarter, and these trends have continued into the fourth quarter," Pennypacker said in a press release. "Subsequently, we've significantly reduced our production build schedules for mobile products to reflect these lower incoming order rates. In addition, we are accelerating the relocation of the Manitowoc crawler production to Shady Grove, taking additional headcount reductions, reducing other non-employee costs and temporarily shutting-down certain mobile production lines during the fourth quarter."

Crane sales for the third quarter were down 20 percent from a year earlier. The operating loss for the quarter rose from $8 million in 2015 to $57 million in 2016, excluding another $77 million for costs related to moving crawler and tower crane productions.

Manitowoc and two other construction equipment manufacturers are a cornerstone of the regional economy. Together they employ thousands.

Volvo Construction Equipment, based in Shippensburg, reports a continued global decline in the market. Europe and India were the exceptions. The North American market was 2 percent below last year. Overall sales for the quarter were off 3 percent.

Wisconsin-based Oshkosh Corp. expects lower sales and operating income from its access equipment production during the next quarter. JLG Industries in McConnellsburg, Shippensburg and Bedford make the access equipment.

Hard times are industrywide. Caterpillar, the world's biggest maker of construction and mining equipment, is expected to post its fifth straight year of declining sales. It recently laid off 155 from its Washington County mining equipment plant.

The purchase of construction equipment lags behind increased road and building construction. Employment is cyclical.

The demand for construction equipment has been flat for a longer time than expected, according to Ross.

Research and Markets forecast in January that the global construction equipment market would average an annual growth of more than 7 percent from 2015 to 2020.

"Some of forecasts are suggesting that it will be in 2018 that we'll see an uptick," Ross said. "We have another year of a flat line. They don't think it will get worse. They just don't think it will get better."

This article is part of a content-sharing partnership between WITF and Public Opinion Online.

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