21.01.2009

Grove lay-offs

The Manitowoc Crane Group laid off 305 production workers and 10 office staff at its Grove facility in Shady Grove on Friday. The cut backs are due to a softening in the North American market for boom trucks and smaller cranes along with order cancellations or postponements due to the lack of finance.

Grove announced just before Christmas that it was considering a reduction of around 130 jobs, but increased it to 315 given a slow start to the year.

Grove employs around 1,200 after the cut backs, but given that the company has added over 700 jobs since 2006, including over 170 in 2008, it is still relatively high.

Shady Grove’s principal products include: National Crane boom trucks, North American truck cranes, Rough Terrain cranes. Other cranes from the Manitowoc group have also been assembled there, and the company has been looking at adding some GMK All Terrain models, most of which are built at the company’s German plant in Wilhelmshaven.

Vertikal Comment

Up until October the crane market looked rock solid with long lead times for many cranes. However two factors have come into play.

The first is that the collapse in residential construction along with the overall slowdown in construction has had an impact on smaller cranes that are associated with this work, including small tower cranes, truck cranes and boom trucks.

Secondly the seizing up of the credit supply is putting some large projects on hold, while preventing some rental companies and contractors from paying for cranes that they have on order.

With the new government in the US pledged to bump start spending on infrastructure, along with some governments in Europe, demand could recover towards the end of the year.

In North America the average age of the overall crane fleet remains high, while pressures on increased crane inspection grow along with an increasing lack of tolerance for old and poorly maintained cranes.

This trend which follows the high number of high profile crane accidents in the country last year is likely to force more contractors to either renew old cranes or outsource more to crane rental companies.

Either way it bodes well for the crane industry which is likely to see both a soft landing and a rapid bounce back as confidence begins to return. Plants such as Shady Grove are likely to be the main benficiaries.