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Manitowoc to cut jobs

December 17, 2008|By KATE S. ALEXANDER

SHADY GROVE, Pa. -- The Manitowoc Crane Group announced Wednesday that it plans to cut about 130 jobs at its Shady Grove plant in 2009, despite seeing solid growth during its third fiscal quarter.

Larry Weyers, executive vice president of the Americas region for Manitowoc Cranes, said in a telephone interview Wednesday that unlike other local manufacturers, Manitowoc is not tightening its belt for lack of demand.

"The decline we are seeing is not in demand; our customers still want our products," he said. "The decline is driven from consumer inability to get financing due to the credit crunch and bailout of the credit industry."

The global crane manufacturer has primarily seen softening in the market for its smaller cranes while demand and financing for larger cranes continues to be strong.

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The Shady Grove plant, purchased by Manitowoc in 2002, produces a mix of small and large cranes, which Weyers said has saved many jobs at the plant.

"We are doing everything we can," he said. "We plan to move some employees to other projects rather than reduce our work force by even more, as other area manufacturers have done."

Franklin County Area Development Corp. President L. Mike Ross, said the layoff at Manitowoc is the first major blow to the local economy.

The crane manufacturer is Franklin County's third-largest employer, with about 2,000 people on the payroll, and Ross said until about 30 days ago, Manitowoc was hiring.

In late September, the Shady Grove plant added 60,000 square feet to its facility and with it 170 jobs, bringing the total jobs added since 2006 to about 700, Weyers said.

At that time, there were many backlogged orders for small cranes waiting for the Shady Grove plant to fill and the company was optimistic that those orders would hold into 2009, he said.

Since then, Weyers said most of the backlogged orders have been delayed or canceled because customers cannot get financing in the current lending market.

While Manitowoc has followed Volvo in Hagerstown and JLG in McConnellsburg, Pa., in work-force reductions, Ross said the local economy continues to hold strong.

Letterkenny Army Depot, the county's largest employer, announced in December that it will be adding about 90 jobs to increase production Mine Resistant Ambush-Protected (MRAP) vehicles.

Summit Health, the county's No. 2 employer, promised at its annual meeting in November that, even though officials are carefully examining their expenditures, it is not considering layoffs.

"Summit Health is in a very healthy financial position at this time, and layoffs are not being considered," Norm Epstein, president and chief executive officer, said last month. "We should note, however, that we are carefully examining our expenditures because of the economic downturn. We are taking a close look at all job openings that come available to see if they are necessary to fill."

Ross said there is cautious optimism among area manufacturers that President-Elect Barack Obama's infrastructure bill will revive some of the lost demand.

Weyers said he anticipates the bill could boost the smaller cranes market, but he said Manitowoc is more interested in what will happen in the lending industry.

"When banks start to release funds into the market again, we could see some turnaround," he said. "If we see turnaround, we could call employees back."

Weyers said the decision to lay off 130 employees in Shady Grove was uncomfortable but necessary to keep Manitowoc suppliers happy, subcontractors healthy and its entire work force busy.

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