Finning International announced today that it intends to close 11 facilities in Western Canada, including its Sparwood operation.

The closures will result in 450 job losses.

Noting continued declines in market activity, the company, the world’s biggest dealer of Caterpillar Inc. equipment, will downsize in Western Canada by more than 20% by mid to late 2016.

Pointing at a 27% drop in new equipment sales from the second quarter of 2015, the company announced a new workforce reduction of approximately 1,100 people, bringing the total workforce reduction to approximately 1,900 people or 13% in 2015, including job cuts in South America.

“In line with significant steps already taken to adjust to the economic downturn, we took further decisive actions to reduce costs and implement sustainable operational improvements as market conditions weakened in the third quarter,” said Scott Thomson, president and CEO of Finning International. “These steps include reducing the size of our global workforce by 1,900 people since the beginning of the year and 2,500 people since the start of the downturn in mid-2013. We also continued to restructure our Canadian branch network, effectively reducing our facility footprint by over 20% since the beginning of the year, to optimize the utilization of our assets throughout the cycle,” said Thompson, who later divulged that Finning’s Sparwood facility was one of the 11 to be closed.

“While these are difficult decisions, we believe we are taking the right path to adjust our business to market realities and ensure financial strength, while simultaneously positioning Finning to deliver customer service more effectively and efficiently over the long-term,” Thomson said.

“These organizational changes, coupled with the operational improvements we are implementing, are driven by our focus on providing value for our customers and our shareholders. In particular, the changes made to our facility footprint are underpinned by our solid commitment to our customers and follow careful consideration of their needs. We believe our resulting facility footprint provides the right support to enhance our customers’ experience, meet their evolving requirements, and improve sales and service levels through our larger service centers and extended resident field teams,” continued Thomson.

“Our focus on managing the factors within our control has contributed to preserving a strong balance sheet and allowed us to improve profitability in our Canadian operations on a quarter by quarter basis throughout 2015 despite a very challenging business environment. Being able to achieve these outcomes under current market conditions gives me confidence that we will be well-positioned when demand strengthens. Going forward, we will continue to implement operating improvements which earn our customers’ loyalty, and maintain cost and capital discipline as we manage through persistent market uncertainty,” concluded Thomson.

Finning also has a facility  in Cranbrook.

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