Even during an slight economic recovery with predicted gains in the transportation sector, 1 in 10 workers at Kenworth Truck Co.’s Chillicothe plant no longer will have a job Monday. This comes as bad news to the PACCAR company factory, which hired more than 1,000 workers in just the last two years alone.
Plant Manager Scott Blue confirmed the manufacturer will lay off 10% of its work force to prepare for a reduction in output at the site. The culprit? The European Union’s financial troubles.
Blue said orders have fallen off by about 10 percent and the company has to decrease its work force to match the demand. Blue said he was disappointed he had to cut staff, but said things might look brighter later this year.
“We think things will be better later on in the year, but this is a step we have to take,” Blue said.
The news came as something of a surprise to some, given the positive financial news lately concerning Kenworth and its parent company, PACCAR Inc. Blue said it’s fair to say the news is surprising, but said truck manufacturing companies across the globe are seeing a slump in demand.
“We (Kenworth) still have a record market share, so this is absolutely (happening) across the industry,” Blue said.
In February, PACCAR Inc. reported its fourth quarter sales for 2011 almost doubled but the ongoing European debt crisis has resulted in smaller truck orders from eurozone countries.
In March, Kenworth unveiled the next-generation, fuel-efficient T680 to be built exclusively in Chillicothe, but Blue said production for the new line won’t start until late May. The new model is complimented by the flagship Kenworth T660 semi truck, which you can view here.
“It’s going to take a little while for that to be a big part of our business,” Blue said.
Blue said he can’t comment on the exact number of employees to be laid off, but said he expects Kenworth to be ready to make a fast comeback when the industry turns around.
“With the market share we have … we’re in a very, very good position to be the first responders during the rebound,” he said.