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Manufacturing layoffs a sign of economic troubles

Most people in Minot notice the major closures around town. Big box retailers have closed or continue to struggle in the era of online shopping and increased competition from discount stores. Smaller retail businesses have closed, such as in Dakota Square Mall, for a variety of reasons which might or might not include market saturation a few years ago when the population was larger.

It isn’t just retail that is struggling, as witnessed by the decision of Canadian-based Bourgault Industries which led to a number of Minot workers being laid off recently.

The company announced in March that it issued layoff notices to about 9 percent of its workforce. Those layoffs became effective in mid-April. It included suspending the manufacturing division in Minot, according to the company.

While manufacturing operations are at least for the time suspended, the company continues to offer other services to its farm customers.

The issues inspiring the decision are not Minot-specific. Rather, they are global and largely related to market forces. However in North Dakota, which is heavily dependent on agriculture, those issues strike at the heart of the economy.

In a press release, Bourgault explained the market forces prompting the change: reduced demand for its products because of factors that include drought conditions over the southwestern half of western Canada, the northern U.S. plains, Australia and parts of Eastern Europe; higher fertilizer and input prices for farmers; and massive steel price increases and price increases in component parts due to tariffs and duties that make farm equipment more expensive.

Additional considerations, according to the company, include low lentil prices due to a new, high tariff imposed by India, softening canola prices due to poor trade relations between Canada and China, and soil moisture issues in many agricultural areas in the country.

While it is encouraging that Bourgault is continuing its sales, parts and service center – and that the manufacturing component could return if market forces change – it is still a loss to Minot. These are well-paying, usually specialized positions that were obviously an advantage to the overall economy. While many laid off workers, with their particular skill sets, might well find employment in the local employment market, it is no guarantee.

Furthermore it is distressful to see the agriculture sector struggling, given low oil prices have not been beneficial to revenue generated from the Bakken, with energy being the other prime driver of the state economy.

Hopefully market forces will improve to the point Bourgault considers returning its manufacturing division to its Minot site in the future; and hopefully, this is not a sign of things to come with other companies in the agriculture sector.

For the time being, the loss is worrisome.

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