Paccar plans worker cuts

Tuesday, November 28, 2006

Paccar plans worker cuts
One production shift will be dropped in Renton plant Jan. 3

The expected slowdown in North American orders for heavy-duty trucks has caught up with Kenworth Truck Co.'s Renton plant.

Paccar Inc., the Bellevue-based parent of Kenworth, said Monday that it plans to lay off workers and reduce production shifts from two to one at Renton, effective Jan. 3.

The company didn't specify how many workers it plans to lay off.

Bernie Philips, a business representative with Machinists District Lodge 160, said the reduction could amount to 160 to 170 workers out of 480 in his bargaining unit alone. But the layoffs could also affect workers in other units, represented by another Machinists local as well as by the Sheet Metal Workers and Painters unions. Representatives of those unions couldn't be reached for comment Monday.

Earlier this month, Paccar reported that the Kenworth Renton plant had about 1,100 employees. No layoffs were announced for Kenworth's other major manufacturing plant, in Chillicothe, Ohio.

Paccar also issued layoff warning notices at another of its divisions, Peterbilt Motors Co. in Madison, Tenn., for 667 workers, according to The Tennessean of Nashville. That's more than half of the plant's hourly work force, the paper said. Layoffs there are effective Jan. 29.

The reduction at Renton is driven by "adjusting production to meet market demand" because of softness in orders, said Paccar Treasurer Andrew Wold.

Both Paccar and industry analysts have been warning that truck sales will be slowing. In its third-quarter earnings statement, Paccar said it expects orders for Class 8 trucks (the heavy-duty vehicles many people refer to as semis) in the United States and Canada to drop from 315,000 in 2006 to 200,000 to 230,000 in 2007.

A major contributor to that drop is truck buyers placing orders now, in advance of new federal truck-engine emission rules, which take effect in 2007. Those tougher emission standards are expected to boost the overall cost of trucks bought next year.

Wold said 2007 is still expected to be a relatively good year for truck manufacturers, "especially if the economy stays relatively strong."

Paccar and Kenworth also plan to introduce a new model, the T660, which replaces the T600; production begins in the first quarter of 2007.

P-I reporter Bill Virgin can be reached at 206-448-8319 or billvirgin@seattlepi.com.

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