The Motor Coach Industries (MCI) manufacturing plant in Pembina, North Dakota, will close by the end of the year.
The closure of the plant that employs nearly 200 workers will be a significant loss for Pembina, a town in northeastern North Dakota with a population of about 500. The plant, which opened in 1963, is the town’s largest employer.
Mayor Mike Fitzgerald told radio station KFGO he learned of the decision in a letter from the parent company, New Flyer Industries, which also has a plant in Crookston, Minnesota. He said it is “devastating” to that region of the state.
He said the letter cited the location of the plant, difficulty in finding quality employees and the company’s planned conversion to electric-powered buses, the radio station reported.
The closure is part of a new cost-cutting plan, according to MCI’s parent company, NFI Group Inc., based in Winnipeg, Manitoba. In late April, NFI cut its revenue forecast for the second time in seven months, citing a global shortage of microprocessors. The company said it is working with alternative suppliers but expected it will need to lower production at some plants, the CBC reported.
Part of efficiency move
The plant’s closure is part of what NFI calls a transformational initiative intended to create a more efficient and integrated company. As part of the initiative, a team conducted several feasibility projects to optimize capacity, consolidate operation, and offset pandemic-related impacts, the company said in a statement.
“The coach business has experienced a significant amount of change over the past two years, including the COVID-19 pandemic and ongoing disruptions to manufacturing operations caused by supply chain shortages, heightened inflation, extreme fuel prices, and a tighter labor market,” said Lindy Norris, NFI Group’s director of marketing and public affairs. “Appropriately staffing MCI’s Pembina facility with the required number of people and skill sets has been especially challenging, even predating the pandemic. Additionally, the above referenced study concluded that the NFI Group has excess manufacturing capacity in North America.”
“These reasons, combined with the planned cessation of a legacy motor coach product and investments made to expand our production and workforce at NFI’s Minnesota facilities, led to today’s decision. We are not offshoring manufacturing or jobs; we are enhancing our flexibility to ready ourselves for electrification at scale in the future. We remain committed to workforce development to ensure North American demand is met with North American manufacturing.”
She added that NFI will offer transition and placement services and redeploy workers at the North Dakota facility within the NFI family where possible, including providing information on employment opportunities at the company’s Minnesota facility. NFI will also manage the workforce transition through retirements and normal job attrition.
“We recognize this announcement of facility closure is concerning and remain committed to supporting our people as best as possible through this difficult transition,” Norris said.