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Motor Coach laying off 190 workers

Staff hired this summer face Christmas axe

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Close to 200 workers at Motor Coach Industries (MCI) are being pulled and pushed by the winds of fortune -- hired this summer only to be told this week they will be laid off before Christmas.

This summer, the Winnipeg intercity coach manufacturer needed to increase its production rate to keep up with orders and hired 185 production workers. Some of them were former MCI workers and members of the International Association of Machinists and Aerospace Workers, the union that represents workers at MCI, who were called back to work.

Management told workers on Thursday that about 190 would be laid off before Christmas, likely those who were just hired.

"MCI had a bump in orders over the summer," company spokeswoman Patricia Plodzeen said.

But it was clearly just a temporary bump. Plodzeen said the workforce will have to be reduced for next year.

"The head count is being addressed for 2013," she said.

Union head Glen Tomchuk said while communication with management has been getting better, the revolving door of getting hired and then laid off is hard on people.

"There is no good time to get laid off, but Christmas is the worst," he said. "There are some people who quit jobs to come here. Now how do you go back to your old employer?"

Tomchuk said that sort of practice is starting to wear thin.

"They are going to find that it's going to get harder to recruit workers," he said.

The company would not comment on such employment dynamics.

Starting pay for a production worker at MCI is about $14.90 per hour.

Some in the industry say there isn't really anything MCI can do about the fluctuations in the volume of orders that need to be filled.

Larry Plachno, a bus tour and charter industry expert and editor and publisher of National Bus Trader of western Illinois, said while tour companies may order a few new buses at a time, public transit authorities in places such as New York and New Jersey order 100-plus buses in one shot and then don't order any more for a few years.

"Unfortunately, MCI has no control over when they (the public transit authorities) go out for bids or how many they order," Plachno said. "All they can do is try to win the bid and build the buses, and they are kind of at the mercy of the market. Then what do you do with production staff you have hired to build them when there is no more orders?"

Plachno, the most reliable source for sales numbers in the North American motor-coach business, said there were about 300 new coaches sold in North America in the third quarter ending Sept. 30.

While that may sound like a small number, it is about four per cent more than in the same period in 2011. But it is a far cry from the peak of the market. In 1998, there were more than 3,000 motor coaches sold in North America. This year, the industry will likely sell a little more than one-third of that number.

Despite the fact the market is declining, MCI maintains its status as the industry heavyweight, commanding about 50 per cent of the sales.

Plachno and others in the tour and charter business are quick to endorse the reliability and durability of MCI buses.

"They will last forever and a day," Plachno said. "They are very, very well-built. If you take care of them, they'll last two to three million miles."

The company has a growing reputation for seeking out productivity and design enhancements.

MCI has been engaged in several projects with the Composites Innovation Centre (CIC), including the development of bus parts using bio-composite materials.

"It is a forward-thinking company," said Sean McKay, chief executive of the CIC. "They are actively engaged in product-improvement projects."

The company just released a new design for its most popular J4500 coach and, earlier this year, it forged an agreement with Daimler to distribute the German-built upscale Setra coach.

In July, Daimler also acquired a minority stake in MCI, which is owned by the New York private-equity firm KPS Capital Partners.

MCI workforce numbers

Unionized workforce at Motor Coach Industries:

Jan. 2010 -- 529

Jan. 2011 -- 529

Jan. 2012 -- 499

Jan. 2013 -- 486 (projected)

Republished from the Winnipeg Free Press print edition October 20, 2012 B6

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