Kobelco Construction Machinery of Moore plans to lay off 75 percent of its workforce on May 1 when the company suspends production of all seven of its hydraulic excavator models.
The Japan-based company learned in January that its main engine supplier, Hino Motors, was unable to obtain EPA certifications for its new model-year engines, "with no clear outlook on future supply schedule."
The engines are needed for the hydraulic excavators produced at the Moore facility.
"After receiving this notice, we have been examining the impact on production and alternate solutions, but we have judged that the production of hydraulic excavators equipped with the relevant engines would be difficult and decided to suspend the production at (Kobelco's) Spartanburg plant," the company stated in a press release.
Plant manager Ralph Wabnitz on Monday said 99 of the plant's 131 employees will be laid off May 1.
"The plant will stay open until a decision about the future of this facility is made," Wabnitz said. "The suspension of production was not a local decision, rather a decision made by our headquarters in Japan."
Kobelco Construction Machinery, founded in 1999 and headquartered in Tokyo, opened the $41 million, 156,000-square-foot production facility at the Tyger River Industrial Park in Moore in March 2016.
As an economic enticement, the company received a $750,000 grant from the S.C. Coordinating Council for Economic Development, as well as tax breaks approved by Spartanburg County Council in 2015.
During its first year, the plant produced 44 excavators. By March 2019, the number climbed beyond 1,000.
Kobelco workers notified
Kobelco filed a WARN Act notice with the U.S. Department of Labor and S.C. Department of Employment Workforce. The Worker Adjustment and Retraining Notification Act (WARN) requires large companies to give employees two months' notice before a closing or major layoff.
It is the second major layoff announced in Spartanburg County this year. In January, Chicago-based LSC Communications announced it would lay off 401 workers and close its east side Spartanburg plant Feb. 18 as the company moved work to other LSC locations.
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Also, in June 2020, county officials learned Toray Composite Materials America shut down operations at its Moore plant because of the economic downturn. An estimated 100 workers were idled.
Toray, which produces carbon fiber for Boeing's facility in North Charleston, cited a collapse in global air travel and reduced demand for passenger aircraft, as well as a reduction in demand for industrial products.
A silver lining
Spartanburg County Councilman David Britt said when he learned in February of the pending layoffs, he reached out to state and federal officials to help Kobelco's supplier obtain its engine certification.
"But due to COVID restrictions, it has made their efforts difficult," said Britt, who chairs the county's economic development committee.
"It is terribly unfortunate to Kobelco and their associates for this to happen at a time when their sales are sky high and their workforce is growing rapidly," Britt said.
Britt said the laid-off workers should have no problem landing work elsewhere if they choose.
Last month, an unnamed company announced it is seeking tax breaks for investing $31.25 million and creating 174 jobs.
Dubbed "Project Slapshot," the project is among six major projects announced this year with a total of $604.65 million in capital investment and 1,533 jobs.
"We are exploding with job opportunities in 2021 and so many of these new companies are offering incredibly competitive compensation packages," Britt said.
"It is never easy to have to change jobs because of a layoff, but if it had to happen, now is the time. And Spartanburg is the place to be for a great new opportunity."
Contact Bob Montgomery at [email protected]
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