Layoffs likely to hit Mack Trucks

[kscarbel2]

The Morning Call (Allentown) / November 3, 2015

Mack Trucks' assembly plant in the Lehigh Valley likely will be hit with layoffs, though the extent of the planned reduction is not yet known.

Stephen J. Marzen Sr., chairman of United Auto Workers Local 677's Mack unit, said in a letter dated Monday that a layoff is likely in the coming months due to an "anticipated daily build rate reduction."

The reduction, he wrote, would trigger "voluntary layoff" opportunities, and workers should review their union-contract language and prepare proper paperwork to initiate or revoke their decision to be let go.

Neither Marzen nor Ed Balukas, Local 677 president, responded Tuesday to interview requests.

Mack [Volvo Group] expects the heavy truck market to decline about 10 percent in 2016 and needs to adapt production at its Lehigh Valley operations to meet market demands, Mack spokeswoman Kim Pupillo said in an email. "It's too soon to say how many employees will be affected, but as soon as we do quantify the impact, we'll be communicating it to our employees first," she said.

Several industry analysts expect heavy truck production to peak this year. In a recent report, Stifel Financial Corp. estimates North American heavy-duty truck production will decline about 15 percent next year.

Fluctuations in Mack's workforce are not uncommon as the company monitors the market and adjusts employment needs accordingly.

For example, the company's Lower Macungie Township facility, where all Mack trucks built for the North American market are assembled, employed about 1,950 as recently as late May. Then, in mid-October, Mack officials said the figure was approximately 1,870. Mack is Lower Macungie's largest employer.

In a separate example, Mack added 200 people in 2012 due to increased demand for heavy-duty trucks. But the boost was short-lived, as the company started laying off 175 production workers in January 2013 because of an industry-wide slowdown.

While the state Department of Labor and Industry has not received a WARN notice tied to the possible layoff this time around, state officials said the regional Rapid Response Coordination Services field representative is aware of the potential for layoffs at Mack.

Pupillo said Mack will meet with employees this week at regularly scheduled quarterly meetings to discuss business results of the quarter.

Through the first nine months of this year, Mack has delivered 18,749 trucks in North America, a 9 percent increase from the 17,136 delivered during the same period in 2014, according to a report released last month by the Sweden-based Volvo Group, Mack's corporate parent.

The company's orders in North America, however, are headed in the opposite direction.

Mack orders declined 51 percent in the third quarter, the result of "dealers focusing on reducing their inventories and the comparison with a good quarter last year," Volvo Group said.

Similarly, in the second quarter, Mack orders were down 50 percent, mainly "a result of cancellations of some of the large quantities of dealer orders placed in the fourth quarter of 2014 combined with a softening in demand in some of Mack's core market segments," such as energy, the company said.

While Volvo said it expects the total North American retail market for heavy-duty trucks to approach 310,000 trucks in 2015, the company is anticipating lower demand, about 280,000 trucks, in 2016.

Despite the lower forecast for next year, local officials last month believed Mack had room to grow in the Lehigh Valley. The Lower Macungie plant, they said, is pumping out 116 trucks a day.

In mid-October, Lower Macungie's Board of Commissioners unanimously adopted a resolution of support for Mack's local operations. In the resolution, the board agreed to facilitate and execute permits and approvals related to construction and renovations of Mack's local operations in a "prompt and efficient manner."

In addition, to further the development and growth of Mack's operations, the board agreed to encourage and advocate, to the fullest extent permitted by law, for economic support from local and state government entities.

At that time, Wade Watson, vice president and general manager of the Lower Macungie plant, issued a statement saying the company had no major expansion plans but is looking to make site improvements designed for efficiency. He also said the facility, now in its 40th year, requires some updates, including sufficient employee parking. In addition, Watson said, Mack is looking to develop space to be more efficient in how it handles trucks that are ready for delivery.

"These sorts of renovations require the support of local government through the permitting process," Watson said in October. "The resolution passed by the Lower Macungie board is simply a commitment from the board to work closely with us as we look to improve our facilities."

[kscarbel2]

Mack brand third quarter orders plunged 51 percent. (http://www.bigmacktrucks.com/index.php?/topic/42364-mack-third-quarter-deliveries-increase-6-percent/?hl=51)

The Morning Call, the long-time Allentown (Lehigh Valley) newspaper, can't come across too harshly, or Volvo will shut them out from future interviews.

But with orders off by more than half, the near future is bleak.

[mowerman]

nobody like to hear that,,,,,thanks for sharing...bob

[41chevy]

All in the V groups master plan, when you're not profitable. there is no need to keep it open.

[mrsmackpaul]

All in the V groups master plan, when you're not profitable. there is no need to keep it open.

well Its in everyones hands in the US to either buy a new Mack and make the company grow and show Volvo its better or dont and Volvo will have the excuse they need to shut the doors remember once those doors are shut we all have no one to blame but our selves

just saying

Paul

[Wobblin-Goblin]

Not good news.

[james j neiweem]

Mack makes great trucks however they don't have the range of models vs the competition. Navistar/Volvo/Paccar/Freightliner. Example:

Granite one BBC offering

CH axle forward one BBC offering

CH axle back one BBC offering

Titan one BBC offering

MHD one BBC offering

MR one BBC offering

Not counting bumper options of course.

With Mack it's one size fits all.

[Joe Ditchkus]

I do not know if Volvo's are good or bad but they sure are lots of them in my area Northeastern Penna. being used for over the road,construction and local pickup and delivery. I noticed some fleets that used Mack and Freightliners are now using Volvo's. Anyone else notice this trend ?Thanks Joe D.

[kscarbel2]

I do not know if Volvo's are good or bad but they sure are lots of them in my area Northeastern Penna. being used for over the road,construction and local pickup and delivery. I noticed some fleets that used Mack and Freightliners are now using Volvo's. Anyone else notice this trend ?Thanks Joe D.

One reason is the larger, more spacious cab.

Particularly for highway applications, the 28-year-old CH cab is smaller than what the competition offers. Drivers can't stand up right out of the seat. Volvo, for 15 years, has exhibited no interest in addressing this issue (until finally......next year).

[mrsmackpaul]

I was speaking to a bloke that goes over to the states quite often and he reckons there are more Macks running on Australian roads than US roads and I think he may be right they seem to be everywhere over here he reckons you hardly see any new Macks in the states

Maybe the US can learn some lessons from their Australian cousins but I doubt that the powers that be would even listen to what goes on out here

Paul

[RedBullDog]

I do not know if Volvo's are good or bad but they sure are lots of them in my area Northeastern Penna. being used for over the road,construction and local pickup and delivery. I noticed some fleets that used Mack and Freightliners are now using Volvo's. Anyone else notice this trend ?Thanks Joe D.

When I read this post it reminded me of something I saw just this morning. On my way to the port of catoosa I went by the Bruckner dealership in Tulsa, and they had a daycab Volvo hooked up to a belly dump rock trailer. It looked pretty dumb. That angular cab is more fitting for highway heroes in flip flops than construction and vocational guys.

[bbigrig]

It's a lack of product offerings in the on highway segment. Mack has been telling everyone they want a larger share of the market and forcing their sales teams to make those gains happen with a 20 year old cab and sleeper. it's time for change. Ask KW why their production is up with its T880 and T680. They listened to customers and produced a product. Mack did that right up until 2000 or so if I'm not mistaken. Hmmmmm

[TeamsterGrrrl]

I suspect Mack is loosing a lot of sales due to the restricted number of models and options. Instead of Volvo trying to spec the trucks and force them down the customers throats, Mack's offerings should be like a veritable erector set with set forward/back axle options, multiple BBC and sleeper sizes, engine options including Cummins, same with multiple transmission and axle options. In short, let the customer choose between any compatable combination of hoods, cabs, sleepers, axles, powertrain, etc..

[mrsmackpaul]

Mack's offerings should be like a veritable erector set with set forward/back axle options, multiple BBC and sleeper sizes, engine options including Cummins, same with multiple transmission and axle options. In short, let the customer choose between any compatable combination of hoods, cabs, sleepers, axles, powertrain, etc..

Thats what they do over here and it seems to work really well as I have said perhaps they could learn something from their Australian cousins

Paul

[Dirtymilkman]

I know it's not just Mack laying off people. My girlfriend works for Cummins and they're doing the same. All the contingents went this week, office workers next week and they figure dec 11 for assembly workers.

[41chevy]

Kraft Heinz Co. announced the layoffs of 2,600 employees and the closing of seven plants in an effort to increase the profitability at the mammoth food-beverage company.

The Heinz plant in LeHigh Vally Pa. will be closed with 12 to 24 months. Interesting is their corporate offices are moving to Chicago. Emanuel Rahm states it is because of Chicago's modern transportation system and diverse highly skilled work force.

http://www.upi.com/Business_News/2015/11/05/Kraft-Heinz-announces-2600-layoffs-7-plant-closings/3311446738293/

[kscarbel2]

Kraft Heinz Co. announced the layoffs of 2,600 employees and the closing of seven plants in an effort to increase the profitability at the mammoth food-beverage company.

The Heinz plant in LeHigh Vally Pa. will be closed with 12 to 24 months. Interesting is their corporate offices are moving to Chicago. Emanuel Rahm states it is because of Chicago's modern transportation system and diverse highly skilled work force.

http://www.upi.com/Business_News/2015/11/05/Kraft-Heinz-announces-2600-layoffs-7-plant-closings/3311446738293/

There is nothing "special" about Chicago's work force...............it's no better than many other areas of the country.

Chicago's property is expensive, the road system is poor and the winter weather adds to operational costs.

Chicago only excels in the quality and quantity of corruption.......as it long has since the gangsters ran the city (do they still, in fact?)

Boeing, Navistar and now the merged Kraft-Heinz have all moved to Chicago. There was no need.........there was no point.

About Kraft-Heinz, merged this past July, Berkshire (Warren Buffet) and Brazilian investment firm 3G Capital own 51 percent. Supposedly Berkshire owns 27% (and 3G 24%), but 3G oversees day-to-day operations (the Brazilians control the company).

[Green Dash]

The small cab and limited choice of configurations have been issues for years and I'm sure I'm not alone in my suspicions about why Volvo has done nothing to at least freshen up Mack's product line. With Mack now on a level playing field with other brands as far as durability and reliability, there's nothing that sets it apart from the rest.

About 95% of all highway tractors purchased by my employer since 2010 have been Mack Pinnacles. There is about a dozen or so Internationals and Freightliners and several hundred Macks. Last year, they bought 6 CNG powered Freightliner Cascadia's and while drivers gave a thumbs down to the performance, they all liked the ride and comfort of the FL cab. Currently there are 14 new diesel powered Cascadias at the Pittsburgh terminal waiting to be put into service, with not a Mack in sight.

[Joe Ditchkus]

Why are the corporations moving to Illinois ? State of Illinois is broke from what I hear on the news.They cannot pay the lottery winners. There has to be some good reasons for the move to Illinois.Thanks Joe D.

[kscarbel2]

Kraft Heinz Co. announced the layoffs of 2,600 employees and the closing of seven plants in an effort to increase the profitability at the mammoth food-beverage company.

The Heinz plant in LeHigh Vally Pa. will be closed with 12 to 24 months. Interesting is their corporate offices are moving to Chicago. Emanuel Rahm states it is because of Chicago's modern transportation system and diverse highly skilled work force.

http://www.upi.com/Business_News/2015/11/05/Kraft-Heinz-announces-2600-layoffs-7-plant-closings/3311446738293/

State wants to prevent closure of Lehigh Valley Kraft plant

The Morning Call / November 5, 2015

The news out of Kraft — then called Kraft Foods Group Inc. — in August 2013 was very different than the blow delivered by the company Wednesday, when it announced it will shutter its Upper Macungie Township plant and put 415 people out of work.

At the time, then-Gov. Tom Corbett heralded Kraft's announcement of a $35 million investment in its Upper Macungie Township facility to add four production lines pumping out products for single-serve coffee-making equipment, saying Kraft was "helping to put Pennsylvanians back to work."

The expansion, aided by a $200,000 Pennsylvania First Program grant, was expected to add at least 45 jobs.

Now, the state could claw back some or all of that grant if it can't reverse the company's decision to close the plant. Lyndsay Kensinger, spokeswoman for the state Department of Community and Economic Development, said the company, now called Kraft Heinz, will undergo final monitoring for the $200,000 grant in March 2016, at which time the specific potential clawback amount will be determined.

But first, Pennsylvania is hoping it can change the company's mind — or at least reach a compromise.

After learning of the closure, Kensinger said, Gov. Tom Wolf instructed his Action Team, a team of economic development professionals, to meet with Kraft Heinz officials to explore opportunities to prevent the closure of the plant or establish a plan to market the facility and secure a new employer at the site.

State Rep. Gary Day, R-Lehigh, echoed that sentiment in one of his own, hoping Kraft Heinz will reconsider the closure and give state officials an opportunity to address their concerns.

"To ensure efficient and effective operations, it is my hope that they realize the strategic geographic location of Upper Macungie Township, which is located within an eight-hour drive of one-third of the country's population," said Day.

Kraft Heinz spokesman Michael Mullen said the company's goal is to identify a buyer for the facility over the next 12 to 24 months before the factory closes. According to Lehigh County property records, the roughly 1 million-square-foot facility on almost 92 acres at 7352 Industrial Blvd. in Upper Macungie has a total assessment of $12.8 million.

The plant makes a variety of products, including condiments such as A.1. Steak Sauce and Grey Poupon mustard. It also makes on-demand coffee products for Keurig and Tassimo.

Kraft Heinz brought bad news to more than just the Lehigh Valley community Wednesday. The Upper Macungie plant is one of seven manufacturing facilities in the United States and Canada that will close as part of a downsizing that will shed 2,600 jobs. The six other plants slated for closure are in Fullerton and San Leandro, Calif.; Federalsburg, Md.; Ontario, Canada; Campbell, N.Y.; and Madison, Wis.

Production at those plants will shift to other factories in North America, Mullen said.

Meanwhile, in New York, Gov. Andrew Cuomo and Sen. Charles Schumer on Wednesday announced an agreement with Kraft Heinz to save three of its upstate plants. The deal includes a matching capital investment from the company and the state in the three plants.

Still, Kraft Heinz decided to close its Campbell plant but, according to New York state, will "work with state, federal and local officials to help find a strategic buyer for the facility that would keep the plant open and retain the 393 jobs."

Kraft completed its merger with H.J. Heinz in July, creating the third-largest food and beverage company in North America.

Since the acquisition closed, the combined Kraft Heinz Co. — co-headquartered in the Chicago area and Pittsburgh — hasn't wasted time in eliminating costs. Brazilian investment firm 3G Capital, which engineered the deal with billionaire investor Warren Buffett's Berkshire Hathaway, has a reputation for deep cost-cutting measures, and executives have said they expect to save $1.5 billion in annual costs by 2017.

In addition, shoppers are increasingly demanding fresher, less-processed food — putting additional financial pressure on food companies.

In August, the cuts began with the company announcing it would eliminate about 2,500 salaried jobs, including 700 in Northfield, Ill. And on Wednesday, the cuts moved to manufacturing, chopping the Upper Macungie plant that benefited from $200,000 in state funds.

Economic experts with Harrisburg think tanks such as the Commonwealth Foundation and the Keystone Research Center say subsidies to big companies like Kraft Heinz are wrong, especially when the business has no firm ties to the area.

So when hearing that Kraft Heinz made the announcement to close a plant that had received state money just two years earlier, Bob Dick, policy analyst for the Commonwealth Foundation, wasn't surprised.

"It's the risk that you run when you hand out these special subsidies," Dick said. Even if the state recovers some or all of the $200,000 grant it dispersed to Kraft Heinz, it is still using resources trying to get back money it handed out in the first place.

Stephen Herzenberg, executive director of the Keystone Research Center, said giving out subsidies to individual businesses is the wrong approach to economic development. That money, he said, could instead be spent on improving employees' skills.

"The bottom line is industrial recruitment, handing out a check to a company, might have been cutting edge in Mississippi in 1953, but it's old and bad practice in Pennsylvania in 2015," Herzenberg said.

[41chevy]

Why are the corporations moving to Illinois ? State of Illinois is broke from what I hear on the news.They cannot pay the lottery winners. There has to be some good reasons for the move to Illinois.Thanks Joe D.

Obama / Rahm machine?

[kscarbel2]

Volvo scales back job cuts in Sweden after union deal

The International Business Times / November 25, 2015

World number two truck maker Volvo said on Tuesday it had withdrawn redundancy [layoff] notices previously handed out to 335 employees after a union deal cutting working hours and wages.

Volvo said in a statement the redundancy notices referred to employees at its Tuve plant, on the west coast of Sweden.

The deal with the IF Metal union meant working hours would be cut by 10 percent in addition to the existing two stoppage days per month while gross wages would be reduced by as much as 4 percent.

An agreed pay hike would also be postponed to March 31 next year while the company pledged not to cut any further jobs in the interim period, the company said.