Retooling leads to resounding success at JCB

In mid-2007, British-based construction equipment manufacturer JCB announced that 2006 had been the best in its 61-year history.

Building on that success, the third largest manufacturer in the industry — behind only Caterpillar and Komatsu — added two new product lines and broke ground for a 200,000-square-foot service center at its North American headquarters in Pooler.

Then the bottom dropped out.

As the world slipped into recession, construction markets dried up and the Pooler plant’s once-robust export business took a nosedive.

Less than 18 months after announcing its best year ever, the company had to lay off some 120 employees locally — about a quarter of its workforce. The Pooler plant, capable of producing some 20,000 machinery units annually, had turned out only 2,500 in 2008.

“Regrettably, these difficult decisions have to be made to ensure the company remains lean and efficient enough to deal with the downturn and enable JCB to bounce back strongly once market conditions improve,” CEO John Patterson said in making the announcement in November 2008.

Those words would prove prophetic.

Two months later, Patterson would deliver the news that another 100 employees would be laid off as the company restructured its Pooler plant in an effort to keep it viable down the road.

While some companies were throwing in the towel, JCB “took advantage of the depressed conditions to reorganize for the long-term growth of our company,” he said.

Part of the global company’s overall strategy was to restructure its operations into product-responsible business units.

As such, the Pooler plant became responsible for the engineering, design and manufacture of all JCB skid steer loaders for worldwide distribution. While it made sense — skid steers represent more than 60 percent of the construction market in North America and nearly 40 percent of the construction equipment market worldwide — it was still a painful process as the plant retooled.

“It was pretty brutal, having to let so many people go,” Patterson recalled. “But it was the only way we were going to survive and come out on the other end.”

Today, the gamble has paid off.

Company revenues for 2011 hit an all-time high, with Pooler-based North American operations contributing significantly to the bottom line.

Skid steer production is at full capacity, with global response to the company’s newly designed line “beyond our expectations,” Patterson said.

The plant is producing 25 machines a day, four times what it was doing just a year ago. The units “are selling faster than we can build them,” he said.

Some 58 percent of the machines are being exported out of the Port of Savannah — primarily to South America, Russia, the Middle East, Africa, Europe and India. No longer just a domestic manufacturer, the local plant now welcomes visitors from around the globe.

And the workforce is pushing 600, with recruiting still in progress.

Patterson is understandably proud of the turnaround.

“In reinventing ourselves, JCB has ensured this plant’s long-term future,” he said.

While the economy still has a long way to go, Patterson sees some encouraging signs.

“Housing starts are beginning to rebound a little,” he said. “That bodes well.”

He also hopes voters will pass a proposed penny sales tax for transportation in July.

“That would not only provide an economic benefit in terms of job creation — and machine sales — but would help us beef up our aging infrastructure,” Patterson said.

“From my perspective, it’s a win-win-win.”