About 220 people are expected to lose their jobs at Nacco Materials Handling Group Inc (NMHG)'s Irvine, Scotland plant after Nacco Industries Inc announced the plant's closing last Thursday.
Current electric forklift production at Irvine will be scaled down in 2008 and cease entirely in early 2009.
Instead, NMHG's new generation of electric counterbalanced forklifts for the European market will start being produced in the Craigavon, Northern Ireland facility, in 2008.
Craigavon will phase out production of 2 to 3 ton pneumatic internal combustion engine (ICE) forklifts for the US market and focus on meeting Europe, Africa and Middle East demand.
Nacco's Berea, Kentucky plant will produce the ICE forklifts, supported by frames and major weldments from the Ramos Arizpe, Mexico plant and other components from the Sulligent, Alabama plant. Sulligent will produce hydraulic cylinders for the masts for the US production and 1 to 5 ton transmissions and drive axles for US and Europe.
The transfer of forklift production from Craigavon will be completed by the end of 2008.
Christina Kmetko, Nacco Industries Inc finance manager, says the company decided Craigavon would become a "mixed model plant", manufacturing electric and ICE forklifts after examining numerous options through a manufacturing review. Overall production rates will be unaffected.
Kmetko's comments come in response to Forkliftaction.com News's question on whether it is more cost-effective to manufacture for the European market in Ireland instead of Scotland.
She says Nacco would not be publicly providing cost savings breakdowns for each of the separate forklift production moves.
Currently, staff numbers at Craigavon are not expected to change as a result of the production move to Berea, but Kmetko says Nacco will be holding comprehensive talks with all Craigavon employees and their representatives in the coming months. About 120 workers at NMHG's European headquarters in Irvine will keep their jobs.
The Irvine plant currently manufactures electric counterbalanced forklifts up to 4.5 ton capacity. Craigavon manufactures ICE pneumatic forklifts up to 5.5 ton capacity while Berea manufactures all models of ICE forklifts up to 8 ton capacity, except the 2 ton to 3 ton pneumatics currently imported from Craigavon.
Manufacturing products in their markets of sale is expected to reduce the company's exposure to fluctuating currencies. By 2011, the program is expected to save USD20 million in annual cost savings and about USD11 million in working capital reductions.
Most of the restructuring costs of about USD5.8 million will go to future severance payments for Irvine employees, Nacco says.