BRADENTON — Pierce Manufacturing has stopped new ambulance orders, and the segment brought down to Bradenton just more than a year ago will shut down entirely by January 2013 — laying off 325 local workers beginning in November.
The drastic downsize marks one of the worst round of layoffs to hit the area in recent years.
Shrinking municipal budgets have made the company’s Medtec ambulance line unprofitable, with sales slowing greatly and customers spending less on new emergency vehicles, parent company Oshkosh Corp. said this morning in a filing with the Security Exchange Commission.
The ambulance segment was relocated from Indiana and Michigan last summer in a consolidation with the fire truck manufacturing plant in Bradenton. But despite those efforts, sales continued to sputter.
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Management met with all 610 employees at the 38th Avenue East plant this morning, then broke into smaller groups to identify the workers who will be impacted.
The layoffs will begin in November, with a gradual ramp down until all existing orders are fully met. The company expects 325 local workers to lose their jobs.
“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 fire and emergency segment 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.
Each employee expected to be laid off will be offered a retention package that includes bonuses if they stay on until pending orders are met, Daggett said.
The fire truck segment will continue operating at the 300,000-square-foot campus in Bradenton.
“We lose money with every ambulance we build,” Daggett 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 today that identified several operating concerns going forward, most notably downsized federal defense budgets and lower municipal spending.
The federal cuts have significantly impacted the company’s defense segment, and municipal spending was a major factor in the decision to exit the ambulance business, the document says.
Oshkosh Thursday reported 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 increase in the third quarter, with $6.4 million in operating income reported. Those gains, however, were driven by the fire truck operations.
Check Bradenton.com later or pick up a copy of Friday’s Bradenton Herald for more on this story.
Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman