Grove Worldwide is reducing its production schedules, cutting employees’ hours, and on the verge of quitting the aerial work platform business in a bid to stem the losses still being made by the company.

“Grove is in a downward spiral that, unless we take immediate and drastic action to reverse, will result in our losing control of our future,” chairman and CEO Jeff Bust told employees in a memo explaining the cuts. The memo was subsequently leaked to a local newspaper.

Bust himself has led the way by taking a pay cut. Other executives have followed him.

The cost-cutting also involves employees working only three weeks out of four this month. Production of Manlift work platforms will be suspended from mid-November to January to clear the 360 unit inventory. The technical training centre in Blue Ridge Summit, near the Shady Grove headquarters, is being sold.

Grove announced third quarter results on 15 August which were below expectations. Net debt continues to grow and now stands at $506m. In the nine months to 1 July 2000 Grove lost $29m before tax. This follows losses of $27m and $11m for the full year fiscal 1999 and 1998.

The losses are due almost entirely to the cost of servicing the debt and problems with Manlift. Grove’s crane manufacturing operations in both the USA and Germany are in reasonably good health. National Crane is having a record year, and new RTs from Shady Grove and ATs from Germany are producing revenue increases.

“We feel good about what we are doing in the crane business,” Bust told Cranes Today. We have had phenomenal success with both the RT600 series and the RT 700 series. We are looking at market share growth there in double digit terms.” He said that Grove Crane had introduced 15 new crane models in the past 18 months, the latest being the TMS 700E truck crane, launched last month (see box).

But crane success has not been enough to offset Manlift problems. Grove has already stopped manufacturing scissor lifts and formed an alliance with scissor manufacturer Skyjack. No benefits have yet resulted from this, Bust said. The aerial work platform market remains difficult and Grove is now reviewing the future of Manlift, with sale a firm options. A decision will be made by mid-November, Bust said.

An additional difficulty for the company during the third quarter was an attempt by the United Steelworkers to unionise the plant. The union put 70 full time organisers onto the campaign, Bust said. The 27 July vote went 62% against unionisation, but the whole issue cost the company $2m in lost production and other expenses. “Keeping union-free is important for our long term efficiency,” said Bust. “We are glad to have this behind us.” Grove expects to default on its banking covenants in the months ahead. Anticipating having to spent more time with the financial community (Grove Holding’s debt is publicly traded), Bust has given John Wheeler a wider remit.

Wheeler is promoted to president and chief operating officer. In addition to his previous role of head of European operations he is now also in charge of operations at Shady Grove. Al Antoniewicz, senior vice president of Operations, reports to Wheeler.

Lynn Dietrich, VP engineering, Dave Birkhauser, senior VP Crane Sales & Marketing for Americas, and Joe Danules, president Grove Manlift, continue to report to Bust.