Some see silver lining in JLG layoffs

August 01, 1997


Staff Writer, Chambersburg

McCONNELLSBURG, Pa. - The announcement that JLG Industries will lay off 850 employees in September may not be bad news for everyone.

Some local business owners say they're expecting a boost in sales if history repeats itself.

"Sales noticeably increase. We've talked about this before. People keep their shopping local," said Mahlon Shimer, owner of Shimer's Racket Store in downtown McConnellsburg.

Instead of "going over the hump" - Shimer's reference to the mountain between McConnellsburg and Chambersburg - to do their shopping, people tend to stay in town, where reduced incomes can be stretched at local hardware stores and groceries, he said.


"Bad times for some is good times for others," Shimer said.

Travel costs also are a factor. People who are laid off don't jump into their cars as quickly to head for malls in Chambersburg, Pa., Maryland and West Virginia, said Mike Newell, sales manager at Hollinshead's, a furniture store, electronic repair service and a Radio Shack outlet.

"Usually, when they (JLG) lay off, business picks up," Newell said.

Products sold locally are just as good as those on the shelves elsewhere, and they're cheaper if mileage is figured in, Newell said.

"We've always said, when JLG is booming, our sales are dying," he said.

For some, the opposite is true.

Ray Robinson, part-time manager and former owner of Johnnie's Diner on Lincoln Way East in downtown McConnellsburg, said the restaurant delivers dinners to JLG workers every night, averaging at least $40 worth of food.

The layoff "is going to affect business," Robinson said. "I hope it's only temporary."

Some JLG workers found at nearby C-B Restaurant and Lounge after their shift on Thursday said they couldn't shed any light on who is expected to lose their jobs or how long they think the layoff will last.

"They still haven't told us how far they're cutting back. Nobody has been informed yet if they're going to be laid off," said one woman who wouldn't identify herself.

A few said they've lined up temporary or part-time jobs in response to the company's announcement and as a supplement to their incomes since JLG began cutting overtime pay to workers in April.

Some JLG workers and McConnellsburg business owners are confident the layoff is only temporary.

"It's going to rebound and everything is going to be cool again," Shimer said. "They have to scale back now, but it'll bounce back again."

Industry analysts are optimistic that JLG not only will survive this downturn, blamed on a "softening" of the market, but will come back even stronger.

Demi Hetrick, director of JLG corporate relations, said Wednesday that the planned layoffs are a result of a "temporary over-saturation of product in the marketplace."

JLG is a strong company, with virtually no debt, a high cash flow and a high return on equity, said Alex Blanton, a machinery analyst at Ingalls-Snyder in New York City.

"They're perfectly capable of dealing with this. Their earnings will be lower but there will be earnings. They'll probably wind up stronger than before," he said.

JLG simply wants to cut production and reduce inventory, which is the reasoning behind the layoffs, Blanton said.

"It's hard to read, but it is a rapidly growing business, so hopefully they'll be back to work before too long," he said.

JLG, with more than 2,500 workers, is Fulton County's largest employer. The company makes vertical lifts.

The Herald-Mail Articles