PKC to Cut 9% of N.A. Workforce
HELSINKI -- Lagging truck sales in North America will lead PKC Group to cut production capacity and shed up to 1,000 workers, the company said today.
The layoffs will affect up to 8.8% of PKC's 11,400 workers in North America, and will be implemented by the end of 2016.
The contract manufacturer will take one-time charges of $5 million related to the shutdowns and expects to save $10 million annually starting next year.
The announcement comes as PKC expects North American truck production volumes to continue to decrease and remain lower over the medium term. The production decline is focusing on heavy-duty trucks, while production of medium duty trucks is estimated to continue at current levels.
"Low fuel prices and interest rates have not accelerated truck sales as expected in the US," PKC said. "Stagnant freight demand, increased supply of competitively priced second hand trucks and reduced need to replace fleets have decreased new truck sales. In addition, sales channel inventory levels are significantly above the historic 10-year average. Therefore, the production volumes have also started to decrease. According to LMC estimates, taking into account economic outlook for the coming years, truck production volumes will stay on a lower level for the medium term."
PKC is a major supplier of wire harnesses to the automotive industry.
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