Financially troubled International Harvester Co., which already has 10,000 workers on indefinite layoff, plans to put another 1,200 employes out of work--900 of them temporarily--this fall because of continuing sluggish sales of combines and other farm implements.
And sources said announcements of layoffs of several hundred workers at Harvester's giant tractor plant in Rock Island, Ill., are imminent.
"It's the markets. They just haven't started to come back," said a spokesman for the Chicago-based truck and farm-equipment maker, which has lost nearly $500 million so far this year. Harvester, which has been operating since December under a $4.2 billion financial bailout arranged by its lenders, is now planning a corporate restructuring that could significantly reduce its size, something analysts believe is essential if it is to escape bankruptcy.
The latest round of layoffs announced by the company affects workers in Harvester's plant in East Moline, Ill. The company said 160 workers on the facility's assembly line that makes planting equipment will be laid off indefinitely beginning Aug. 2. Another 140 who work on the combine assembly line and in tractor-cab production will be laid off indefinitely on Aug. 26.
On Sept. 9, the company said, another 900 workers will be laid off until Nov. 1 as most of the plant, with the exception of tractor-cab production and fabricating work, is shut down.
Harvester has been reducing employment through indefinite layoffs and shutting down plants for weeks at a time in recent months in an attempt to cut costs and reduce costly inventories of unsold farm equipment. Sales of combines, for instance, which are used to harvest grain, are down 40 percent from last year throughout the farm equipment industry, according to the Farm Industrial Equipment Institute.
The hinted shutdown of the Farmall tractor plant in Rock Island would be the third there this year. Among the facility's products is a series of sophisticated heavy-duty farm tractors that the company introduced last year in a bid to lure customers back to tractor showrooms. Sales of the tractors have been disappointing.