January 23, 2017
SAF-Holland USA says it will close its two plants in Michigan and shift their component manufacturing to three of its remaining factories, which are closer to customers. As part of the restructuring, the Muskegon facility will retain the company’s Americas headquarters and engineering operations, and absorb sales and administrative functions from Holland.
Production will transition to locations in Dumas, Arkansas, Cincinnati, Ohio, and Wylie, Texas, the company announced last week. It will invest about $3 million at those facilities, and will build “a new state-of-the-art engineering and technology center” in Muskegon. Two other U.S. plants are not affected.
All production now in the U.S. will stay here, Steffen Schewerda, president, Americas, for SAF-Holland, told HDT on Jan. 23.
Meanwhile, production will be adjusted to lower demand for components as a part of “market swings,” he said. For the coming year, “the forecast is a little bit down in the truck business and a little bit down in the trailer business. Nothing abnormal.
“For me, it’s a matter of the external and internal supply chain and where is my customer base,” he continued. “Logistics is a huge part of costs.” For example, moving some production to Cincinnati will better serve the Kenworth plant at Chillicothe, in southern Ohio.
Ending of Michigan production will affect 230 jobs, of which 180 to 190 will go to Cincinnati, Dumas and Wylie. Michigan workers who are willing to move might get at least some of those jobs, Schewerda said. Sixty to 70 administrative workers from Holland will be shifted to Muskegon, about 30 miles away.
The Muskegon and Holland plants now make auxiliary-axle suspensions, fifth wheels, couplings and drawbars.
The transition, which is expected to be implemented over 18 months, will lead to one-time restructuring costs of as much as $10 million this year. That will consist mainly of moving costs, impairment on machines and equipment, and severance payments.
EDITOR’S NOTE: This story updates the one posted on Jan. 20.