Manitowoc Cranes will need plenty of help to ramp up production of crawler cranes at its Grove Crane plant in Shady Grove.
Direct employment is expected to increase over the next 36 months by 250 jobs with another 100 support positions created within the organization, according to L. Michael Ross, president of the Franklin County Area Development Corp.
The announcement brings a sigh of relief with it. Manitowoc in March announced an unspecified number of layoffs at both the Shady Grove and Manitowoc, Wisconsin, plants. The Shady Grove workforce was “endangered,” Ross said.
The Grove plant currently employs about 900 workers. The 300-acre complex has made hydraulic cranes for decades and last year began producing crawler cranes “with the quality and reliability customers expect,” according to Manitowoc’s announcement on Monday.
Manitowoc said the work would be moving from its plant in Manitowoc, Wisconsin. While the company is expected to offer positions to certain employees from Wisconsin, “they are expected to hire a lot of folks locally,” Ross said.
“This thing is going to be on a relatively fast timeline,” Ross said. “They’re moving quickly on this. They’ve established deadlines for us. They were very firm about when they wanted to make a decision. They’re aggressively trying to implement their plan.”
Manitowoc indicated it would begin the move after August and finish it by the middle of 2017.
“We have been working with Manitowoc for the last several months to support their decision,” Ross said.
Ross applauded the efforts of the Governor’s Action Team and Southcentral Pennsylvania Works in working to expand Manitowoc.
“As a major employer in Franklin County for many years, we welcome Manitowoc’s decision to move its operations, and create more than 250 new jobs (in) Pennsylvania,” Pennsylvania Gov. Tom Wolf said. “Manitowoc is committed to the community in Franklin County and understands that this is the best location to grow its business and make impactful investments within the region and beyond.”
The company has committed to investing at least $19 million in the project, according to Wolf. Manitowoc also has pledged to create 250 new, full-time jobs over the next three years, and retain its current Pennsylvania workforce of 891 employees for four years.
Manitowoc received a $1.35 million Pennsylvania First program grant from the Department of Community and Economic Development for equipment and relocation costs.
SCPa Works is offering a similar amount in workforce development training and incumbent worker training, Ross said.
The plant in Shady Grove will be retrofitted, but buildings won’t necessarily be expanded, Ross said.
“We’re hopeful this decision will bode well long term for Franklin County,” he said.
The expansion will create welding positions, Ross said.
FCADC has recruited an international welding school from Slovakia because of the local demand for welders. Officials broke ground less than a month ago for the Phenomenal Industries Welding Training Center in the Cumberland Valley Business Park. Classes are to start in spring.
“I don’t think it drove Manitowoc’s decision, but it helped validate the decision,” Ross said. “It helped alleviate some of their concerns about how to train welders.”
Manitowoc announced that consolidating at Shady Grove will make a more efficient manufacturing footprint, lower costs and increased margins.
The decision speaks to the Franklin County workforce, Ross said.
“Manitowoc’s decision to expand operations in Shady Grove is welcome news,” said Georgina Cranston, executive director of the Greencastle-Antrim Chamber of Commerce. “Manitowoc is an important employer in this area and has always been always supportive of the community. Personally, the chamber is delighted about the news. The footprint of this expansion will trickle across many platforms, and likely enhance and benefit many entities.”
“We have the capacity to accept the workload,” Ross said. “All in all, this was an important decision for Franklin County and Pennsylvania. We’re very, very happy of the outcome.”
The decision says good things for the future of manufacturing in the Cumberland Valley, Ross said. It also sends a positive message to local companies that make parts and signs for the original equipment manufacturers in the area.
The Manitowoc move is expected to have the opposite effect on vendors and suppliers in Wisconsin. Layoffs will go beyond the Manitowoc Company, according to Peter Wills, executive director of Progress Lakeshore, the Manitowoc economic development corporation.
He said Progress Lakeshore will work with the Wisconsin Department of Workforce Development, the Wisconsin Economic Development Corporation, the Bay Area Workforce Development Board, Manitowoc Job Center and the city to provide rapid response for those laid off.
The company has not said how many jobs would be lost in Wisconsin.
“After a comprehensive analysis and review of our current manufacturing footprint, coupled with current market conditions, we believe this restructuring initiative will ensure that our business continues to meet and exceed the needs of our customers every day,” said Barry Pennypacker, Manitowoc president and chief executive officer. “We further recognize that this will have a personal impact on people who have been dedicated to Manitowoc. We thank them for their contributions to the achievements of our business, and are committed to treating them fairly and with respect throughout this process.”
Manitowoc will keep its corporate headquarters and its product engineering and related support functions in Manitowoc.
The company on Monday reported a 4 percent decline in sales for the second quarter, compared to a year earlier. In previous financial filings, the company had expressed plans to cut about $200 million in costs over the next three to five years as part of an effort to achieve double-digit operating margins.
Pennypacker said the market is challenging, especially in mobile cranes in the Americas, only partly offset by tower cranes.
“We expect to see a similar dynamic in sales with continued strength in tower cranes more than offset by continued weakness in mobile cranes,” Pennypacker said. “In spite of the positive energy we experienced at bauma (the world’s largest trade fair for the construction industry) this year, it is clear that our customers remain cautious around spending, given the ongoing global macro-economic uncertainty. As a result, we have lowered our full-year 2016 sales and operating margin guidance.
“We are confident, however, that the actions we are taking now to position Manitowoc over the long term will allow us to exit this cycle stronger and poised to deliver significant profit growth and shareholder value creation.”
Founded in 1902, Manitowoc has a presence in 20 countries. It makes Grove and Shuttlelift mobile telescopic cranes, Manitowoc crawler-mounted lattice-boom cranes and Potain self-erecting tower cranes.
The machines are used in energy production, industrial projects, transportation construction and building construction.
This article comes to us through a content-sharing partnership between WITF and the Chambersburg Public Opinion.