The downgrade reflects Grove's weak operating performance and delays in achieving planned cost reductions, she said.
Grove's sales for the nine months ended July 3 were down by 12 percent. The corporation's earnings before taxes were down 41 percent in the same period, Pretto said.
In the first quarter of this year, Grove reported a 20 percent reduction in sales and a 65 percent reduction in earnings. Its debt at the end of 1998 was $482 million, an amount that hasn't changed significantly, Pretto said.
Simmons said Tuesday that Grove's status for the period ending Sept. 30 won't be announced until sometime in November.
According to Mark King, an industry analyst in New York, Grove's rebound is affected in part by new competition from a Westport, Conn.-based heavy crane maker called Terex Corp. Since early 1998, about the same time that Grove was bought by Keystone Inc., a Fort Worth, Texas, investment firm for $605 million, Terex has stepped up competition, King said. "The market is much more competitive now."
Terex spokesman Jack Lascar said his is a $2 billion company which was started in the early 1980s as a division of General Motors. Northwest Engineering Corp. bought it in 1987, Lascar said.
Terex makes heavy earth-moving and surface mining equipment as well as small, medium and large cranes and aerial work platforms, Lascar said.
In 1993 the company sold about $70 million worth of cranes. Last year it sold $770 million worth, Lascar said.
Grove spokesman Robert Kannel called Terex a major competitor. "We're working hard to strengthen our share in the crane and aerial manlifts markets," he said.
King said Grove is responding to Terex by offering discounts. "The market is still healthy and Grove is a well-recognized name," King said.
Pretto and King said Grove's operating performance has been adversely affected by difficulties in setting up a corporate-wide software system. The delays have led to material shortages, production delays and manufacturing and delivery problems.
When Keystone bought Grove in March 1998, its newly hired executives set a cost-savings goal of $50 million, a figure the company has been unable to achieve, Pretto said.
Two top executives have resigned in recent weeks.
The first to go was Salvatore J. "Sam" Bonanno, Grove Worldwide's chairman and chief executive officer who was hired by Keystone. Bonnano resigned to "pursue other interests," according to a company statement on Oct. 6. He was replaced by Grove President Jeffry D. Bust.
About two weeks later, Donald Manvel, president of Grove Manlift, the company's aerial work platform division, announced his resignation "to pursue other business opportunities. Manvel had held the job since March. He was replaced by Joseph Danules, former vice president of Grove Manlift Sales and Marketing.