It’s been a roller-coaster ride for staff and management at Finning Canada’s Centre of Excellence in Red Deer. But the track ahead looks stable and smooth, says plant manager Scott Wakefield.
When Caterpillar dealer Finning acquired the former Collicutt Energy Services Ltd. plant in January 2008, it projected that a workforce of about 330 would be needed to customize new products for customers and overhaul used equipment. However, the ensuing recession curbed the appetite for heavy machinery in virtually every industry, and Finning was forced to impose a hiring freeze after staff at the centre peaked at 340.
“We had enough corporate backlog to take us through the first quarter of 2009,” said Wakefield.
But by last fall, the payroll at the Red Deer plant had shrunk by two thirds. Across Western Canada, Finning laid off 1,200 people.
What a difference a year makes.
“All of the markets are starting to come back,” said Wakefield, pointing in particular to the mining sector — which includes the oilsands.
A flood of new equipment orders is expected to translate into a backlog of prep work in the months ahead, he said. And the demand for machine overhauls is even greater, with the Centre of Excellence expected to complete 71 this year. That compares with about 50 during the preceding year and a half.
“Our budget for next year is 79, but it’s a pretty conservative budget.”
Staff at the Centre of Excellence has now bulked up to about 230, with heavy-duty mechanics and apprentices making up much of the increase.
“We’re looking for another 50 or 60 employees,” said Wakefield.
About half of the newly hired staff consists of workers Finning had previously laid off.
“The next 60 is the big one,” acknowledged Wakefield, who believes many qualified people remain available as energy companies in the region slowly return to life.
“I think there’s a little window of opportunity right now.”
Unfortunately, Finning has encountered a certain degree of caution among prospective hires.
“The thing that haunts us is when you had a layoff of 200, people get a little concerned about the sustainability of our increase,” said Wakefield. “We need to dispel that.”
He pointed out that the recession was unlike anything the world had seen before.
“We think we’ll get the busts and booms, but they won’t be to the extent that we had on this one.
“Right now it’s a boom, and we don’t see the boom quitting anytime soon — definitely not through 2011. Our backlog that we’ve got right now is quite substantial.
“We want people to understand that we’re looking for long term. We’re not looking for short term.”
Wakefield thinks part of the challenge Finning faces is the mindset of workers in an oil- and gas-dependent economy. It’s hard to convince them that employment at the Centre of Excellence will not be cyclical.
On the positive side, he added, Red Deer is a desirable community that many workers want to remain in or move to. And there aren’t as many competing employers as is the case in Edmonton and Calgary.
Reducing staff was a painful process, said Wakefield.
But it forced Finning to improve its cost structure — with expenses dropping from about 35 per cent of revenue to less than 25 per cent.
“So it allowed us to become much leaner and meaner.
“Now our focus is to keep lean and mean.”
That, and to convince prospective employees of the long-term prospects at the Centre of Excellence.
hrichards@www.reddeeradvocate.com