Grove lays off dozens more

May 17, 2001

Grove lays off dozens more

Shady Grove, Pa.

By RICHARD F. BELISLE / Staff Writer, Waynesboro

The first of approximately 135 workers at Grove Worldwide will get layoff slips today as the crane maker continues to fight a declining market, company officials said Wednesday.

This latest round of layoffs brings the total of jobs lost at Grove facilities in Franklin County to more than 1,000 since Keystone Investments bought the company in April 1998 for $605 million.

Grove had more than 2,500 workers at the time of the sale, according to published reports, although company officials would never verify the number.


"With the current economic conditions there simply is not enough work to keep everyone totally productive," Jeffry D. Bust, Grove chairman and chief executive officer, said in prepared remarks.

The timing of the layoffs will extend through June to coincide with the move of Grove's customer support operation from Chambersburg, Pa., to new consolidated facilities in the main plant at Shady Grove.

Grove announced last week that the U.S. Bankruptcy Court of the Middle District of Pennsylvania had approved the company's bid for a major reorganization. Grove sought Chapter 11 bankruptcy protection.

The company reduced its $584 million debt in a deal with its lender banks in which the banks agreed to knock off $205 million of Grove debt in return for company stock.

That deal cut Grove's annual interest payment on the debt from $63 million a year to $17 million, company officials have said.

The agreement also included a commitment from the banks led by Chase Manhattan Bank for $35 million in interim funds. That money will allow Grove to continue to buy raw materials and supplies, pay its employees and continue its manufacturing operations, the company said.

Bust has said that the bankruptcy protection means that Grove can continue business as usual.

He said in his statement Wednesday that the new round of layoffs is "not related in any way to the Chapter 11 filing. We must continue to run our business as usual and make decisions, however difficult, that are in the best long-term interest for all of us at Grove."

Early in 1999, 210 workers were laid off. In October of that year, another 175 workers, mostly white collar, were let go. Another 30 white collar employees lost their jobs in March 2000, including some high-ranking managers. About 260 workers were laid off in September 2000 and an additional 140 were furloughed the following month. In January of this year, Grove cut 290 more jobs.

"We will continue to look at our staffing needs," Keith R. Simmons, senior vice president, said Wednesday. "We have good business now, but we have to staff appropriately."

He said the new layoffs, like the previous ones, are considered to be permanent unless business turns around and orders for cranes increase. In that case, workers would be recalled, he said.

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