US housing slump deals blow to Bobcat as many jobs moving to GwinnerWith home construction slumping and no boom in sight, Bobcat Co. -- North Dakota's largest manufacturing firm -- is closing its production line in Bismarck, giving the capital city a cold dose of economic reality.
By: Dave Roepke, INFORUM
With home construction slumping and no boom in sight, Bobcat Co. -- North Dakota's largest manufacturing firm -- is closing its production line in Bismarck, giving the capital city a cold dose of economic reality.
The plant closure will eliminate 475 hourly and salaried jobs in Bismarck, shifting as many as 390 positions to the Bobcat facility in Gwinner, N.D. It is set to begin in October and be done by year’s end.
Rich Goldsbury, Bobcat’s president, attributed what he said was a “painful yet necessary decision” to the depressed housing market. Demand for Bobcat’s light construction equipment is strongly linked to home construction, he said.
There were about 2 million housing starts in 2005, Goldsbury said. The rate of homes built has shrunk to about 500,000 per year and appears to be stabilizing at the lower level.
“We don’t see the uptick happening,” Goldsbury said.
Comparing the plants in Gwinner and Bismarck to washing machines, Goldsbury said Bobcat has found itself short on laundry.
“We’ve only got one load,” he said.
The immediate effect on families who rely on a Bobcat paycheck could be harsh; many have been employed there for years and could have a tough time finding similar work.
“That payroll’s got to be in the millions,” said Dave Kemnitz, the Bismarck-based state president of the AFL-CIO. “It’s horrendous for the community.”
Jeremy Bauer, president of the United Steelworkers Local 566 in Bismarck, said workers were still coming to grips with the plant’s demise. The move had been rumored, but workers first heard about it on Wednesday.
“Right now people are just trying to figure out what they’re going to do,” Bauer said.
It is Bismarck’s strongest taste yet of the fallout from global recession. The city has consistently had one of the lowest rates of unemployment in the nation. In July, it had the lowest of any city in the U.S. at 3.1 percent, according to the Bureau of Labor Statistics.
“Certainly, the golden bubble that we’ve been operating under has been burst,” Bismarck-Mandan Development Association President Russ Staiger told The Associated Press. “We’ve been very sheltered, if you will, because we’ve had a lot of diversified growth in our community.”
Losing one of the city’s top 10 employers is bound to have a trickle-down effect and hurt businesses that depended on Bobcat and its workers, said Kelvin Hullet, president of the Bismarck-Mandan Chamber of Commerce.
Goldsbury said the plant will likely be put up for sale, a recruitment effort that Gov. John Hoeven said could involve the state.
The plant closure comes as North Dakota is shedding manufacturing jobs for the first time in years. From July 2004 to July 2008, the state went from 25,400 manufacturing positions to 26,800, state figures show. But from July 2008 to July 2009, it lost all those gains and more, falling to 23,900 factory jobs.
Hoeven said Wednesday if the national economy improves, he believes the state can once again start expanding manufacturing.
“We can continue that trend,” the governor said.
Closing the Bismarck plant will move production of Bobcat’s mini-excavator, Toolcat machine, S70 skid-steer loader and mini-track loader to Gwinner.
Jobs went to Gwinner, where Bobcat began in 1947 as Melroe Manufacturing Co., because the plant there is larger, Goldsbury said. About 150 non-production jobs will stay in Bismarck.
When it’s completed, the move will bring the Bobcat work force in North Dakota to about 1,500, Laura Ness Owens, a company spokeswoman, told The AP. That’s down from the 2,600 Bobcat employed across the state just two years ago.
The consolidation isn’t connected to a new plant expected to open next year in South Korea, the home country of Bobcat’s owner, Doosan Infracore Co.
Goldsbury said executives at Bobcat’s headquarters in West Fargo made the decision, albeit with input from Doosan. Making Bobcat products for North America abroad wouldn’t be efficient, he said.
“It doesn’t make a heck of a lot of sense to ship a lot of iron across the big pond,” he said.
Hoeven said he met on Aug. 13 with an executive from Doosan who indicated the potential for Bobcat to close its plant in Bismarck, following up the next day with a Fargo meeting with Goldsbury and the state’s congressional delegation.
“Our push to them was, ‘Hey, what can we do?’ ” said Hoeven, who said company officials didn’t let him know the decision was final until Tuesday night.
Hoeven said he asked if Doosan could move some other operations to North Dakota to allow it to keep Bismarck’s plant open, but was told the construction equipment conglomerate has already laid off 40 percent of its workers.
“It’s not just here,” he said.
Key dates in Bobcat Co. history
1958 – Gwinner-based Melroe Manufacturing Co. buys rights to the Keller Loader, a compact 3-wheeled loader in-vented by brothers Louis and Cyril Keller to clean turkey barns.
1965 – Melroe establishes markets in Europe.
1969 – Melroe acquired by Clark Equipment Co.
1974 – Bismarck plant begins production.
1984 – Melroe introduces the Bobcat cathead logo.
1989 – Melroe begins production of mini-excavators at Bismarck plant.
1992 – Record sales in Europe: $150 million.
1995 – Bermuda-based Ingersoll-Rand Co. Ltd. buys Melroe and Clark Equipment.
1998 – Melroe renamed Bobcat Co.
2001 – Bobcat produces 500,000th skid-steer loader.
2002 – Bobcat produces 50,000th mini-excavator.
2007 – South Korea’s Doosan Infracore Co. buys Bobcat for $4.9 billion.
2008 – Bobcat’s 50th anniversary of the skid-steer loader.
2009 – Bobcat announces closure of Bismarck plant.
Source: Bobcat Co.
Readers can reach Forum reporter Dave Roepke at (701) 241-5535