Kenworth to Cut 10% of Jobs at Chillicothe Plant

April 11, 2012

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The Chillicothe Gazette is reporting that Kenworth plans to lay off 10% of workers at its Chillicothe, Ohio plant on Monday.

Plant Manager Scott Blue told the Gazette that orders have dropped by about 10%, and the staff cuts were necessary to match demand.

"We think things will be better later on in the year, but this is a step we have to take," he told the paper.

The company recently announced that all Kenworth T680 trucks will be built at the Chillicothe plant. Kenworth's parent company, Paccar, just reported record quarterly revenues in February.

ACT Research says it's not as much of a surprise as it may seem. The industry forecasting group already was expecting the industry to reduce build rates in the second quarter by about 4.5%.

"The news generally fit our expectations," said ACT's Kenny Vieth. "Build earlier this year was too strong relative to the rate of incoming orders. As an example, at the end of February, the three- and six-month order trends were at 296,000 annual rates, while build in February occurred at a 320,000 annual rate. Tack on continued order weakness into March and I think there is a good case to be made for a pullback in production in the near-term."

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