Spartan Chassis will lay off 289 temporary workers next month as military contracts it has been working on come to an end and it waits for others to start, according to the Lansing (Mich.) State Journal.
The layoffs, announced on Wednesday (Sept. 24), come as Charlotte, Mich.-based Spartan, a unit of Spartan Motors Inc., starts to wind down subcontract work for some mine-resistant ambush protected vehicles (MRAPs). The military had ordered 15,000 of the vehicles to protect troops in Iraq and elsewhere. Spartan is providing the chassis for about one-third of those vehicles.
Spartan Chassis spokeswoman Karen Hildebrant said the military work is not ending permanently. Instead, the company is in a lull between contracts.
The temp worker layoffs will come in mid-October, she said. But the workers might have a chance to come back to work in a few months when work on other military contracts picks up.
At the same time, another segment of Spartan’s business has weakened.
Spartan also makes chassis for motorhomes. Sales of recreational vehicles have slumped as gas prices soared and the economy faltered.
“The motorhome market is really taking a hit right now,” Hildebrant said. “They seem to be a luxury item people aren’t willing to invest their money in at this time.”
As the RV market softened, Spartan had made up for much of the slack by taking on more military contracts. In the past year, Spartan bought and renovated two buildings to keep up with the demand for military vehicles.
A year ago, the company had 1,100 workers in Charlotte and had plans to create another 125 jobs.
In July, Spartan reported earnings of $10.42 million, or 33 cents a share, during the three-month period that ended in June. That was up 59.8% from the $6.52 million, or 20 cents a share, the company earned one year earlier.
Sales grew 28.8% to $196.52 million in the recent quarter from $152.58 million one year earlier.