Haas Reduces Production, Slashes Overtime in California
With the vast majority of global machine tools coming out of Europe and Asia, California-based Haas Automation might sound like it’s in a perfect position to benefit from tariffs placed on imports that President Donald Trump says will kickstart American manufacturing.
However, any longer-term reshoring is way off in the distance. Instead, Haas is facing an immediate pullback in production from its manufacturing customers as they weigh increases in raw materials and components prices.
“In recent days, we’ve seen a dramatic decrease in demand for our machine tools from both domestic and foreign customers,” Haas automations official said. “Out of caution, we have reduced production and eliminated overtime at our sole manufacturing plant in Oxnard, California, where we employ 1,700 workers and have been in operation since 1983. We have also halted hiring and put new employment requisitions on hold.”
Because reshoring will require new equipment, Haas officials said they’re worried that the administration could slash tariffs on machines from Taiwan (companies such as YCM and Hartford), Japan (Okuma, Makino) and Korea (DN Solutions, Hwacheon) to avoid making manufacturing investments in the U.S. more expensive.
Worse, Haas imports some of the materials and components it uses in its machine tools, so tariff breaks for Asian machine tool makers could give them a major cost advantage over American-produced machines.
“Without a corresponding reduction in tariff rates for imported raw materials and components into the U.S., such a scenario would be catastrophic to the $5 billion U.S. machine tool industry, which is a key component of U.S. national security,” Haas officials said.
—Robert Schoenberger