AGCO, the Duluth-based farm equipment maker, said it is laying off 24 workers at a plant in Kansas and said more layoffs may occur in the weeks ahead.
The company behind the Massey Ferguson, Challenger and other equipment brands said workers at its Hesston plant will be affected by the initial layoffs. The plant, which employs about 1,500 workers, makes combines, balers and mowers sold in the U.S. and exported around the world.
AGCO blamed a drop in commodity prices, which has given farming operations less money for their crops, and as a result less money to purchase equipment.
The same reason was given for a drop in second-quarter sales and net income. While the company said it expected farm production to increase in the months ahead, it was lowering its profitability outlook for the year.
Second-quarter sales dropped about 10 percent to $2.8 billion, the company reported. Tractor sales were down 2 percent in North America, 6 percent in western Europe and 18 percent in South America, the company said.
Sales of combines were down 4 percent in Western Europe, 15 percent in North America and 25 percent in South America.
At Hesston, the company is reducing the number of shifts to two from three at the facility’s plants involved in machining, welding, fabrication and laser operations.
“It’s likely we will need to make additional reductions to our work force in the coming weeks,” the company said in a statement.
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