JLG Industries, McConnellsburg, Pa., announced the permanent closure of its facility in Orrville, Ohio, as part of the company's ongoing capacity rationalization plan.
The 320,000-square-foot facility currently produces the Gradall brand telescopic material handler product line, which will be integrated into the company's McConnellsburg, Pa., facility.
“Over the past several years, we have made immense progress in improving our manufacturing processes and throughput capability, a by-product of which has been the significant addition of capacity,” said CEO Bill Lasky. “When combined with our focus on core activities and start-up of European assembly operations in our new Belgium facility, these process improvements enable us to permanently reduce our overhead without sacrificing our ability to satisfy customer demands. We are going to capitalize on this slow economic period to continue to transition our manufacturing model to correlate production with customer orders.”
Commenting on the overall financial impact, Jim Woodward, senior vice president and CFO, said, “Net additions at McConnellsburg, the closing of the Orrville facility will result in a reduction of approximately 90 people over the course of the next eight months. This capacity adjustment involves an estimated one-time pre-tax charge of $7.7 million with an expected payback period of just over one year. Of the $7.7 million, cash charges of approximately $4.5 million are associated with the personnel reductions and plant closing, and non-cash charges of $3.2 million reflect write-down of idle facilities associated with the closure.”