Wisconsin Manufacturing News

Manufacturers such as Strattec, Rexnord, Manitowoc Co., and Oshkosh Corp. make cuts, TAPCO moves to Brown Deer, economy takes toll on Johnson Outdoors

More job cuts compound in another terrible week in Wisconsin

Automotive supplier Strattec Security Corp. reported a fiscal second quarter loss of $1.2 million, or 38 cents per share, compared with net income of $1.3 million, or 38 cents per share, in the same period a year ago.

Net sales for the company’s second quarter were $33.8 million, compared with $39.9 million for the same period a year earlier.

The slowdown has prompted the company to eliminate 20 salaried positions, and 86 production workers at its Glendale plant have been placed on temporary layoffs.

The declines in sales and profitability during the current quarter reflect the overall weakness in the U.S. economy, and in particular the sharp decline in vehicle sales and production during the quarter.

Harold Stratton II, chairman, president and chief executive officer, said, "We are reacting to the unprecedented decline in the North American auto industry in several ways. In our second quarter, we reduced our productive work force at both our Milwaukee, Wis., and Juarez, Mexico, facilities through a combination of temporary and permanent layoffs. We will continue to adjust our productive work force in this way until the business improves or stabilizes at a predictable level."

Since the beginning of its fiscal year, Strattec has not been replacing salaried workers who retired or left the company through normal attrition, saving nearly $1 million on an annualized basis. On Jan. 15, the company reduced its U.S. salaried work force by approximately 10 percent.

The company also has frozen executive officer salaries at their 2008 levels and reduced the firm’s 401k match for salaried associates, saving approximately $2 million on an annualized basis.

Meanwhile, Bon-Ton Stores Inc., the York, Pa.-based parent company of Boston Stores, announced Thursday it will eliminate 1,150 jobs, including 150 in Wisconsin, as the American retail industry continues to shrink.

Rexnord LLC, the parent company of Falk Corp., laid off approximately 100 more workers at its headquarters in Milwaukee and cut 60 additional jobs in other plants across the nation this week, according to Karen Schwenke, vice president of corporate marketing for Rexnord.

"As a result of the economy and the general overall demand for our products, jobs had to be cut," she said.

Schwenke said the eliminated jobs ranged from factory floor to white collar positions.

Rexnord previously eliminated 60 jobs last November.

Farther north, Manitowoc Co. announced it is cutting 2,100 jobs, or 22 percent of its workforce in its crane division.

To the west, Pacal Holdings LLC announced it is temporarily laying off 89 workers from its plant in La Crosse.

In the central part of the state, a sharpening decline in commercial, industrial and school construction throughout the world triggered a second round of job cuts in as many months at Greenheck Fan Corp. in Schofield. An additional 155 production workers were told this week that their jobs will be eliminated in February.

Losses mounting for Johnson Outdoors

Johnson Outdoors Inc. lost $6.9 million, or 76 cents per share, in its fiscal first quarter, after losing $5.0 million, or 40 cents per share, in the same period a year ago.

The Racine-based outdoor equipment manufacturer’s quarterly net sales dropped to $69.8 million from $76.0 million a year earlier.

"Disappointing 2008 holiday retail sales and declines in consumer spending and consumer confidence levels have made retailers even more focused on keeping their inventories down. This has resulted in an adjustment in the timing of customer orders, which we believe will coincide more closely to consumer purchase patterns of our warm-weather seasonal goods. We have taken immediate steps to minimize impact on operations and cash flow, and to ensure our cost structure reflects the rapidly evolving economic climate in which we are doing business," said Helen Johnson-Leipold, chairman and chief executive officer.

The company previously announced it had eliminated 90 jobs.

"The ongoing success of an enterprise is predicated on its ability to meet the goals and needs of the business and organization today without compromising its ability to do so in the future. Undoubtedly, the current economic environment presents a significant challenge to every company. Ours is no exception. We are acting quickly and prudently to help ensure we weather the economic storm, and emerge stronger and better positioned for growth and profitability when our markets rebound. Amending our credit agreements and our ongoing cost reduction plans were necessary milestones which will help ensure the long-term strength of the company," Johnson-Leipold said.


TAPCO to move to Brown Deer

Traffic and Parking Control Co Inc. (TAPCO), an Elm Grove company that is benefiting from an increased desire for traffic safety and energy efficiency in the United States and internationally, is moving to larger headquarters in Brown Deer to accommodate business growth.

TAPCO is doubling its size in its new headquarters and expanding its workforce. The company is renovating a former printing plant at 5100 W. Brown Deer Road., where it expects to move into the 128,000-square-foot building in March.

"We need to give this company the space it needs to grow," said Richard "Rick" Bergholz, chief executive officer.

"We’re just jammed in here now," he added, referring to the TAPCO’s 57,000-square-foot existing facility in Elm Grove.

Berholz is the son of the late Raymond Bergholz, who founded the company in the basement of his Wauwatosa home in 1956. Demand for the company’s traffic and parking control products has risen steadily since those early beginnings.

"However, it’s not just a heightened concern for traffic safety that has fostered TAPCO’s growth," according to John Kugel, president and co-owner of the company. "The growth also can be attributed to the company’s enterprising culture, to its early engagement with green, sustainable products and materials plus its recent entry into the federal government’s marketplace."

BlinkerSigns are perhaps the most noticeable TAPCO innovation.

"The solar-powered traffic signs incorporate LED technology to create a blinking sign that is much more visible than an unlit sign, thus increasing safety for both drivers and pedestrians," Bergholz said. "While the process was a long one to get the federal government and states to approve the signs, they are now widely seen as a preferred way to increase safety in a wide variety of traffic settings."

"Innovation is the No. 1 way to recession-proof yourself," said Andrew Bergholz, a company vice president who is Rick’s son. "At the end of the day, what really matters though is that the products work. BlinkerSigns are a great example of innovation that responds to a real need and that works much better than traditional non-lighted signs."

The Wisconsin Department of Commerce, in cooperation with the Village of Brown Deer, helped the company secure a $5.1 million Industrial Revenue Bond allocation to help acquire the Brown Deer building.

The company anticipates its expansion project will lead to creation of 15 new jobs, on top of its current base of 120 employees. TAPCO will invest about $1 million to renovate the building, incorporating green, sustainable building practices as much as possible.


Oshkosh Corp. cuts 1,050 more jobs

Oshkosh Corp. a manufacturer of specialty vehicles and vehicle bodies, today announced it has eliminated 1,050 more jobs and reported a first-quarter net loss of $20.6 million, or 28 cents per share, compared with a net income of $37.3 million, or 50 cents per share, in the same period a year ago.

The company’s quarterly sales fell to $1.39 billion from $1.50 billion a year earlier.

Oshkosh Corp.’s latest job cuts, which reduced its work force by 7 percent, come atop a previous round of 1,400 layoffs last summer.

"We are obviously disappointed in the overall performance we are reporting today. It has been widely reported that global manufacturing orders and activity fell sharply in November and December 2008. Certain of our businesses shared this experience, which led to our weak performance in our first quarter. Fortunately, our defense, fire apparatus and domestic refuse collection vehicle businesses continued to report solid results," said Robert Bohn, Oshkosh Corp.’s chairman and chief executive officer.

Due to the losses, Bohn said the company does not expect to be able to avoid violating a financial covenant in its credit agreement.

"We have commenced discussions with our lead banks to seek an amendment to our credit agreement in the second quarter of fiscal 2009. We believe that we will be successful in finalizing an amendment that will provide us with financial covenant relief. We anticipate that the amendment will entail upfront fees and higher interest costs than under our current credit agreement," Bohn said. "In response to the weaker economic outlook, we have taken further measures to reduce our costs. These actions include a reduction in workforce of 7 percent, which is in addition to the workforce reduction concluded in the summer of 2008. Additionally, we have further reduced production, announced closures of a number of underutilized facilities and slashed spending in general. We understand these decisions will have wide-ranging effects on our employees, their families and the communities in which we operate, but we believe they are necessary in the current environment."

 

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