Heavy-Equipment Dealer Finning Slashes 1,100 Jobs

By Judy McKinnon 

Finning International Inc., the world's largest dealer of Caterpillar Inc. equipment, said Thursday it would slash another 1,100 jobs as it continues to grapple with weak demand, underscoring the impact the commodity slump is having on the heavy-equipment sector.

Vancouver, British Columbia-based Finning said the latest job cuts bring its overall workforce reductions to 1,900 employees, or 13%, since the start of the year. In addition to the job cuts, Finning said it would close 11 facilities in Western Canada.

Lower prices for oil, gold and other commodities have led mining companies and oil drillers to pare spending plans and scale back operations, hurting industry suppliers. Late last month, Peoria, Ill.-based Caterpillar, which makes the mining and construction equipment that Finning distributes, sharply cut its earnings forecast for the year and reiterated a warning that sales would fall in 2016 for a fourth consecutive year.

Finning said the facility closures in Western Canada will reduce the size of its overall presence in the energy-rich area of Canada by more than 20% by the end of next year. The latest closures are in addition to 16 operations it had already shut. Besides Western Canada, Finning operates in four South American countries as well as the U.K. and Ireland.

Industry headwinds contributed to a 10% drop in Finning's third-quarter revenue, largely related to a 30% decline in new-equipment sales from the same year-ago period. The company's earnings also fell shy of analyst expectations. Revenue from Canadian operations took the biggest hit, falling 16% from a year earlier.

"While these are difficult decisions, we believe we are taking the right path to adjust our business to market realities and ensure financial strength," Chief Executive Scott Thomson said in a news release.

Finning's latest job cuts affect 450 workers in its Canadian operations and about 550 employees in South America.

Finning's shares were recently down 8% in Toronto Stock Exchange trading.

Write to Judy McKinnon at [e-mail]

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(END) Dow Jones Newswires

November 12, 2015 11:40 ET (16:40 GMT)

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