The St. Cloud Times has a breaking news item:

New Flyer, the company hailed as a St. Cloud success story, will lay off about 320 workers.

The company announced in its second-quarter report that it will cut staff by 270 in its facilities across the company, which includes St. Cloud, Crookston and Winnipeg, Canada. About 50 salaried workers will be cut, too, most of those in Winnipeg.

New Flyer was, unfortunately, the site of Sheriff-Vice President Joe Biden's local stop on the stimulus tour. The money that was supposed to flow from state budgets to New Flyer to buy new buses isn't getting there, as deliveries are being delayed by buyers not getting funding. There are approximately 1000 jobs in Minnesota and 1200 in Winnipeg. So this cuts about a seventh of their workforce. MPR explained three weeks ago that the cancellation of a bus order from the Chicago Transit Authority, which claims the cancellation was due to not being able to use federal stimulus dollars (I have read conflicting reports on this, one saying they could not use them for buses, the other saying CTA got less than half of the funds requested, and made the decision themselves to delay the order -- the latter is what MPR reported.) Canadian press says the layoffs are "indefinite" and that there will be a two-week shutdown at the end of the year for all plants.

At minimum, this is a timing problem: you can't make all the buses at once, but if people put off taking delivery you either have to build, pay workers and suppliers and hold inventory, or you have to lay off and wait for the orders to re-emerge. The second seems to be the way they've gone, but for how long will they wait?

Labels: economics, Obama, St. Cloud