Siemens Cuts Wyoming Plant

December 9, 2005
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WYOMING — Siemens Logistics and Assembly Systems (L&A) informed employees this morning that, as feared, it would close its Eastern Avenue plant here when a large deployment for the U.S. Postal Service is completed in mid-2006.

Approximately 330 hourly employees will be affected, with 80-90 transferring to the Plymouth Avenue plant in Grand Rapids in January and February. John Raab, vice president of marketing and communications, said the fate of the remaining jobs will be determined at the time of closure.

The reorganization includes the Jan. 1 formation of a separate legal entity called “Dematic.” Through this, 180 salaried jobs will be eliminated in Grand Rapids, roughly 15 percent of the former Rapistan’s 1,200-member salaried workforce in Grand Rapids. Close to 100 of those employees have been transferred to Siemens divisions in other states.

After the restructuring plan was completed last week, Raab explained, there remained 60 positions in Grand Rapids that could not be absorbed by the parent company. Those will be eliminated.

A press release said that the action is intended to bring its staff and costs closer in line with reduced order rates.

“We evaluated many different options to help the company be more competitive in a difficult market, but ultimately decided that these changes are necessary for the health and future of the organization,” said Prashant Ranade, president and CEO of L&A’s North American operations. “We understand how difficult this is for our employees, their families and the community, but recognize that we must restructure and scale back, if we want to strengthen our position and move forward.”

In August, Siemens announced its decision to fold its material-flow solutions business into a new subsidiary called Dematic GmbH. The decision was driven by the four-year, 35 percent decline in the market for package handling conveyors, which has left the company with approximately 200,000 excess square feet of manufacturing space.

“In the highly competitive market for conveyance and sortation systems, our customers expect us to control our fixed and variable costs,” said Ranade. “So, we need to consolidate our facilities and reduce our fixed overhead expenses.”

The original Plymouth Avenue plant in Grand Rapids will remain the production center, he said.

“Locating production adjacent to the product and project engineering offices in Grand Rapids makes the most sense,” Ranade’s statement said. “We deeply regret the loss of any job.”

Company representatives will be working with affected employees regarding severance benefits and to assist individuals with the transition.

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