A Kelowna-based business has shed 65 manufacturing jobs, as the plunging price of oil made continuing on this side of the border untenable, says a company executive.
Agility Fuel Systems has been a provider of natural gas fuel systems for heavy duty commercial vehicles, based out of Kelowna since 2001.
“We started with one person, then we grew to 100 employees,” said founder Todd Sloan, who explained that the company was originally called Enviromech Industries, but changed its name after it merged with its competitor, Alabama Fab, in 2010.
With the layoffs, which were announced at the beginning of October, the number of employees at the local shop will dwindle to 25 over the course of the next six months.
All of the remaining positions will be on the tech side of the company.
The manufacturing arm will now take place in North Carolina, where the company opened a new $20 million facility trumpeted as ‘world class’ earlier this month.
In addition to lower operating costs—the cost of living and minimum wage is lower in the American state—the move ensures the company will benefit from the fact that the new plant is within a three-hour drive of its top clients.
It’s a boon to its bottom line and makes it increasingly competitive, but Sloan said that the company intended to keep the manufacturing arm of the company in Kelowna.
Employees have said they were told to expect at least a couple more years of work.
“We were hoping the oil prices would turn around and then we could sustain both (plants),” said Sloan.
“But when oil prices go down, so too goes the demand for our product.”
Manufacturing, in general, is an increasingly difficult business to sustain in Kelowna, he said, pointing out that jobs in that field are continually drifting away from the region.
That said, he pointed out that there is nothing local or provincial governments could have done to keep their business local. It’s just market forces prompting the move.
What has kept the tech arm of the company in Kelowna is simply the fact that the engineers who started the company, or moved to the area as it grew, don’t want to leave. And they don’t have to.
UBC Okanagan has a good engineering program, and up and coming professionals in the field are fed to the company.
There are also good program grants this side of the border.
Sloan said the Scientific Research and Experimental Development Program is one of the reasons why the company will keep its tech arm of the business in Kelowna.
“We can be remote and build the technology where we want to live,” he said.
“The company’s new 204,000-square-foot facility in North Carolina is the first truly vertically-integrated natural gas fuel system manufacturing plant in North America and is a game-changer for our industry.
“From the raw aluminum and steel for the frames and covers to the resin and carbon fiber for the cylinders, to installation onto the truck, Agility will now have complete control in one location over the quality, cost, and delivery of our natural gas fuel systems to our customers,” reads a press release.