Guelph’s Hitachi plant on Woodlawn Road has laid off its entire production staff.
The company has placed all 129 of its hourly production workers on temporary layoff due to the bottoming out of the market for the huge mining vehicles the plant produces.
Bruce Murray, the plant’s Chief Operating Officer, said it is hoped that half of those 129 will be brought back in January. The future of the other half is unknown at this time.
“We’ll be sending out recall notices for some of the employees later this month,” Murray said Wednesday in an interview.
“Approximately half will be coming back in January initially,” he said, adding that the future of the other half is unknown, although he hopes more will be brought back.
“We are expecting some additional activity that will allow us to bring additional people in,” Murray said.
“(The timing) is more of an emotional effect. Financially they’re not suffering too badly. They’re guaranteed 95 per cent of their earnings during their temporary layoffs,” Murray said.
Murray said 129 people laid off were all unionized employees and Murray said for the duration of their short-term layoff — roughly 35 weeks — they would be receiving 95 per cent of their pay, between supplementary layoff pay negotiated in their agreement and unemployment insurance.
The layoffs leave 146 salaried employees still employed at the plant, all office staff.
“There’s been no layoff in the salary group yet,” he said.
Murray said the company has asked as many of them as possible to take vacation during the month of December.
Murray said the timing of the layoffs is difficult, but that the plant has been “holding on to the hourly staff for about two years in total believing that the market was going to come back.”
He said the reason the company did that was because the training cost of the company’s hourly employees, most of who have worked at the plant for a long time, made it a better investment.
“But it got to the point we were running out of work for them. We really didn’t have much of a choice.”
It’s not a real hardship for these guys in the short term. In the long term it becomes a little more worrisome,” Murray said.
In May 2013 the Woodlawn Road plant underwent a major $32 million expansion. At that time it was stated that the plant would end up with close to 1,000 employees in the ensuing five years, but the demand for the product never materialized.
Murray said the overall downturn in the mining industry has hit the plant.
“Right now the clients we ultimately sell to pretty much cancelled their capital expenditure programs,” he said, adding that the larger trucks manufactured at the Woodlawn Road plant typically sell for $3 million-plus and the mines usually buy more than one at a time.
“The larger mines are pulling in their horns and are saying ‘no, we’re just going to sit this out.’”
Murray said the Woodlawn Road plant will be shifting its focus to supplying parts and rebuilding used trucks. They will also be looking at getting involved in financing their products to help sell them.
“Our major competition like Caterpillar and Komatsu are going through exactly the same thing,” he said.