SOUTHERN TIER
Economic downturn trickles down
It sounds unorthodox, but David Canfield can offer reasons why the shipping industry is a reasonable barometer of the economy.
If you see more trucks on the road making deliveries to department stores or other businesses, it’s a pretty good bet people are spending. When one doesn’t see as many trucks on the road, then that’s a sign companies are doing whatever is necessary to cut costs, bracing for the worst because consumers are being frugal.
The trickle-down effect has already impacted Prestolite Electric, according to Canfield — the company’s director of global marketing.
The Arcade plant, which manufactures starters and alternators for large class six-, seven-and eight-sized trucks, had a glum holiday season as it trimmed staff — letting go some of its short timers along with salaried, white-collared employees in sales and engineering, he said. Prestolite officials also said its plant will not replace anyone who retires or resigns in the immediate future.
“We think that the worst has happened within the company,” Canfield said. “We don’t expect anything worst than what we’ve got going on right now, but it’s hard to say with what’s going on with the economy right now.
“This isn’t a real a good time for us,” Canfield said. “There are a lot of things affecting the trucking industry. Any time the economy starts to go south, the trucking industry is hurt by it. . . . But typically we’re the first to rebound [when the economy improves].”
But with the uncertainty of the national and global economy, Prestolite isn’t expecting an immediate surge during the first quarter of the fiscal year.
Prestolite isn’t the only Southern Tier-based truck-parts operation experiencing some softness in the market.
Cummins Inc., which makes diesel engines for heavy-duty trucks, recently released about 100 temporary employees, according to spokesman Mark Land. Despite the layoffs, he said the Jamestown plant is still the largest private employer in Chautauqua County with 1,300.
While Land said the company did well in terms of profit margin, he noted that things started to slow down in the third quarter before becoming really sluggish in the fourth quarter.
“We don’t talk about what we might do, but we’re monitoring it very closely obviously,” Land said of whether more layoffs are in the Jamestown facility’s future. “We’ve taken a lot of steps at Jamestown and other places because demand has really fallen . . . If it continues to fall, we’ll have to consider everything. What would happen with manufacturing plants, it’s plant-by-plant decision. If things continue to drop in the heavy duty trucking [industry], . . . we haven’t done anything yet which is the positive, but it’s no guarantee.”
While Cummins has battened down the hatches, Donald Rychnowski, executive director for the Southern Tier West Regional Planning and Development Board, said the impact of the economic crisis hasn’t been as volatile in Chautauqua and Cattaraugus counties as it has been in other regions in the state.
Rychnowski said local banks in Chautauqua and Cattaraugus counties are still offering mortgages as they haven’t been incapacitated by the mortgage crisis.
Rychnowski said industrial diversity and agriculture have always been the key in Cattaraugus and Chautauqua, so he said the Southern Tier hasn’t been completely crushed by the recession.
“We don’t have a great number of businesses that are tied that close to the auto industry,” Rychnowski said. “There is some impact, some business slowdowns but we haven’t seen the same kinds of layoffs or projected layoffs as other areas in Western New York or New York state. . . . We didn’t see the kind of spurts of growth or recovery from the last recession that other areas had.”
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