The lower Canadian dollar and the loss of Russian markets have affected Canadian equipment manufacturers
More than 400 workers at New Holland’s manufacturing plant in Sask-atoon will soon be out of work.
New Holland’s parent company, CNH Industrial, confirmed last week that 413 workers, which is more than half of the plant’s workforce, will be laid off beginning in May.
Most of the layoffs will be temporary, CNH said in a statement from its headquarters in Burr Ridge, Illinois.
Nearly 340 of the laid off workers are expected to return to the job in August, but another 75 will lose their jobs permanently.
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The company said the layoffs were in response to “economic conditions.”
New Holland Saskatoon is Canada’s largest farm implement manufacturer.
The plant produces more than 10 different farm implements used for seeding, tillage and harvesting.
Brand names produced at the plant include New Holland, Case-IH and Flexi-Coil.
Derek Lothian, executive director of the Saskatchewan Manufacturing Council, said market conditions are exerting pressure on all of the province’s manufacturers.
“The pressures definitely have been felt for a number of months now, not only in ag implements but across a wide swath of Saskatchewan manufacturing,” Lothian said.
A down-turn in the oil and resource development industries and weaker prices for agricultural commodities have dampened market optimism in Western Canada and the United States.
“Farm implements in particular have been hit hard,” said Lothian, who is also vice-president of Canadian Manufacturers & Exporters.
“With ongoing political unrest in Eastern Europe and Russia, perennial drought in Australia and dampened demand, both here at home and south of the border, you have a pretty good recipe for significant challenges in the marketplace.”
The loss of Russian markets and the devaluation of the ruble have significantly affected Canadian manufacturing companies that were exporting goods to Russia and other eastern European countries.
Lothian said the lower Canadian dollar, which is normally linked to increased export volumes, has helped manufacturers in other parts of Canada more than it has helped farm machinery makers in Saskatchewan. That’s because many Sask-atchewan manufacturers have built a natural hedge against currency fluctuations.
“The lower Canadian dollar, quite frankly, benefits manufacturers in say, Ontario, a lot more than it does in Saskatchewan,” he said.
“If you’re selling internationally, of course when the dollar is lower, you’re repatriating more money back home, that’s true. But on the flip side of that, many (Saskatchewan) companies have made the purposeful decision to supply and buy components in American dollars, so when one is up, the other is down. Yes, the lower Canadian dollar probably still does have a net benefit when it comes to exports, but it’s really not as prevalent here as it is in other jurisdictions in Canada.”
The Saskatoon New Holland plant is one of 11 CNH manufacturing plants in North America and one of 26 worldwide. Products manufactured at the Saskatoon facility are sold in Canada, Australia, Kazakhstan, the U.S. and China.
Affected workers received news of their layoffs March 23.
