26.01.2017

JLG announces plant closures

JLG has announced plans to close its production facility in Maasmechelen, Belgium along with its technology and development centre in Bruntingthorpe, Leicestershire, UK.

It will also close its telehandler production lines in Orville Ohio and move them to its plants in Pennsylvania. As the part of the move the European telehandler range will be slimmed down and production moved to the company’s plant in Medias, Romania.

Pre Delivery Inspection at the Maasmechelen plant will be transferred to other JLG facilities and distribution outlets, while a small group of employees will be retained in the Bruntingthorpe area or elsewhere within Europe to support the reduced telehandler range.

The proposed changes could affect up to 525 employees by the time that the plants in Orrville and Maasmechelen are closed, which is likely to be by the end of September. The Maasmechelen PDI facility is likely to remain open for between 12 and 18 months. The company is estimating that the change will cost between $45 and $50 million, but will save from $20 to $25 million a year from 2018.

JLG president Frank Nerenhausen said: “As part of our simplification strategy, we have evaluated our global manufacturing footprint and product offering to ensure our operations and product portfolio continue to remain competitive and meet current and future market demands. These planned actions allow us to improve performance to maintain our position as an access equipment leader around the globe.These actions, although difficult, are the right ones for our business. Simplifying our product portfolio and operations aligns with our long term vision and strategic direction, positioning JLG to deliver an enhanced customer experience and improved return on investment moving forward.”

Vertikal Comment

This move is probably more related to changes in contracts for the OEM machines that the Maasmechelen plant builds for Caterpillar. JLG has not managed to win any significant market share in Europe for its own brand telehandlers in spite of the product receiving a positive reception. Caterpillar is we understand planning to bring telehandler production back in house again in order to use spare capacity at its own facilities- although this has not been confirmed.

The Belgian plant is a first class facility but limited in its scope for expansion and probably expensive to run. Meanwhile the company has spare capacity at a number of its other plants. The move is also likely to transfer some production back to the USA, which might go down well with the new regime in the White House?

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