BRADENTON -- Pierce Manufacturing has stopped taking any new ambulance orders, and the division that was moved to the company's Bradenton plant a little more than a year ago, will shut down entirely by January -- laying off 325 local workers.
The downsizing, which will begin in November, is one of the largest to hit the area since the recession began.
Shrinking municipal budgets have made the company's Medtec ambulance line unprofitable, with sales slowing and customers spending less on new emergency vehicles, parent company Oshkosh Corp. reported Thursday in a filing with the Security Exchange Commission.
The ambulance segment was relocated from Indiana and Michigan last summer in a consolidation with the existing fire truck manufacturing plant in Bradenton.
But despite efforts to trim costs, sales continued to sputter.
Management met with all 610 employees at the 38th Avenue East plant Thursday morning, then broke into smaller groups to identify the workers who will be impacted.
The layoffs will begin with a gradual ramp down until all existing orders are fully met.
"Medtec has been losing money for quite a few years," said John Daggett, vice president of communications for Oshkosh. "We hoped the relocation to Florida would return the business to profitability, and for the past 16 months we spent significant resources to improve those deficiencies, but despite all of the efforts, the operation continues to result in a loss."
In January 2011, Oshkosh began the consolidation of Medtec Ambulance production into the existing fire and emergency facilities in Bradenton.
The company was given $1.44 million in state and local governments incentives for the move, which was completed last summer. Oshkosh also invested about $5 million in facility enhancements and other related expenses, records show.
The 325 employees identified for layoffs will be offered bonuses if they stay until pending orders are met. Severance packages also will be presented to the workers, Daggett said.
Employment agencies already have reached out to Pierce's human resources department to discuss scheduling a career fair there to help the displaced workers.
The fire truck segment will continue operating at the 300,000-square-foot campus in Bradenton.
"We lose money every ambulance we build," Dag
gett said. "This is a very difficult decision, and there's still a lot of moving parts. We can't find out everything until we talk to our dealers and customers."
Oshkosh released filings with the SEC Thursday that identified several operating concerns going forward, most notably downsized federal defense budgets and lower municipal spending.
The government cuts have significantly impacted the company's defense segment and have become a major factor in the decision to exit the ambulance business, the document says.
"The market conditions just changed for them," said Sharon Hillstrom, president and CEO of the Manatee Economic Development Corp. "We certainly didn't expect that to happen. It's disappointing, and from their prospective, surprising because they put a lot of money into that move."
Oshkosh recorded a third quarter net income of $75.7 million, or $0.82 per diluted share, compared to $68.4 million during the same time last year.
The fire and emergency segment also saw net sales and operating income increases in the third quarter, with $6.4 million in operating income reported. Those gains, however, were driven by the fire truck operations.
Although manufacturing has been one of the more stable sectors through the recession, industry leaders fear the same government cutbacks that have pushed Medtec out of Bradenton could cause other local manufacturers to fold.
"I'm afraid this is not going to be the only example we see," said Peter Straw, executive director of the Sarasota Manatee Manufacturers Association. "I don't know that we have had the new hiring in the industry to absorb that number of layoffs. It's not a good sign for the sector."
County officials also were distraught by the decision. Some commissioners contacted Thursday couldn't recall the last time they granted performance-based incentives to an expanding company that then erased the new jobs so soon.
"Jobs is what we're all about at the commission," Commissioner Larry Bustle said. "Part of that is retaining jobs."
Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman