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Grove job cuts loom

December 07, 1998|By RICHARD F. BELISLE, Waynesboro

SHADY GROVE, Pa. - The president of Grove Worldwide LCC said Monday that up to 330 jobs, most of them in production, might be cut next month if business doesn't improve for the giant crane maker.

If the layoffs occur it will be the second time Grove cut its work force this year.

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In August, 225 workers, both production and salaried, were furloughed.

That reduction came a month after Grove's crane-making plant in Sunderland, England, closed, eliminating 670 jobs there.

"We're not sure this is going to happen, but management made a commitment to employees to be open about potential reductions. We are honoring that commitment by providing this advance notice," Jeffry Bust, president and chief operating officer, said Monday.

If orders for cranes and aerial work platforms do not increase significantly in December, Grove will have to cut production to match the reduced demand, Bust said.

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"We have chosen not to take any preliminary action involving reductions in force until after the end of this year," Bust said.

Instead, he said, some workers are being transferred from the production line to the maintenance department to do general maintenance work.

"Additionally, we are exploring options such as voluntary early retirement programs to help reduce the scope of any involuntary reductions," Bust said.

"We sincerely hope that this action will not be necessary. We want to reassure employees that we are doing everything possible to increase sales and to capture every available opportunity the worldwide market presents," he said.

The fourth quarter historically has been Grove's weakest, he said. This year the downturns in the economies of Russia and the Pacific nations have made Grove's customers hesitant to invest in expensive equipment like cranes, he said.

The job cuts would be mostly in manufacturing and operations support areas and their related administrative positions, he said.

Jobs in revenue generation, customer support, product development and sales and marketing would not be affected, Bust said.

Grove was sold to Keystone, Inc., a Fort Worth, Texas, investment firm in May. Since then, Keystone executives replaced many of Grove's top corporate officers, including the chairman and chief executive officer.

At the time, a Keystone spokeswoman said the new owners would offer Grove guidance, financial resources and a chance to increase efficiency.

Grove had about 5,300 employees worldwide at the time.

Grove does not verify employment figures, but it is estimated that about 2,500 people work in the company's Shady Grove operation.

Grove designs and builds mobile hydraulic cranes, truck-mounted cranes and self-propelled aerial work platforms.

In an example of the fluctuating market, Grove in April hired 120 workers to keep up with increased private orders and an open-ended government contract to produce up to 450 all-terrain cranes for the military.

L. Michael Ross, executive director of the Franklin County Area Development Corp., said Monday that Grove is the county's largest employer.

Grove's payroll and assets, plus the outsourcing of work to smaller area companies, make it the company with the largest single effect on the area's economy.

Outsourcing is the practice of purchasing goods from outside shops.

"Any activity shift up or down at Grove has a tremendous effect on the region's economy," Ross said. "It's the No. 1 player in Franklin County."

He said some companies wait too long to recognize market indicators and end up having to take drastic measures to ensure their long-term stability.

"Grove is being very wise in evaluating its marketplace and responding appropriately. It's unfortunate, but they are clearly putting their employees on notice," Ross said.

"Hopefully, they will be successful in getting more orders and minimizing any downsizing," he said.

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