E-One lays off workers while parent company expands holdings

OCALA -- As fire truck manufacturer E-One lays off workers in Ocala, its parent corporation is spending more than $100 million to buy a high-tech company.

E-One president Peter Guile did not return calls seeking comment Tuesday. Federal Signal spokesman John Segvich didn't confirm the number of workers laid off, but did acknowledge in a written statement that layoffs are taking place.

"Resizing E-One is painful, but it is a necessary step to restore the profitability of the business," the statement said. "This will enable us to continue to invest in new product development and in updating our manufacturing facilities to ensure the sustainability of the business, so that we can provide good paying and rewarding jobs into the future."

Segvich added that Federal Signal remains committed to the fire-rescue vehicle business and will do "whatever it takes" to ensure E-One's long-term success.

Rusty Skinner, executive vice president of CLM Workforce Development said about 10 former E-One workers had visited the job service's Ocala office since Friday.

"We had some contact us on Friday, and some again on Monday," Skinner said. "We got the impression that it was a small type of situation."

Federal Signal CEO Robert Welding and chief financial officer Stephanie Kushner told investors in July that the company would cut $10 million in fixed expenses from E-One by the end of the year.

Federal Signal announced Monday that it is spending $115 million to buy PIPS Technology, a Tennessee-based maker of automated license plate recognition systems. The acquisition, the third purchase of a high-tech company by Federal Signal this year, will become part of the company's Safety and Security Systems Group.

Wall Street reacted positively to the purchase announcement, driving Federal Signal stock up by nearly 11 percent to $14.81 a share by the end of the day Tuesday.

"Investors are seeing the transformation of Federal Signal is truly happening," said Walter Liptak, an analyst who covers the company for Chicago-based Barrington Research. "It's a great move. This acquisition is validation for investors that Federal Signal is executing on the promise of a new vision for the company."

There's no reason to believe E-One won't be part of that vision, Liptak added.

"They're definitely a core part of the business," he said. "I don't think the company's made any indication that E-One's up for sale."

Earlier this year, Federal Signal dropped a plan to spend up to $50 million for a new E-One plant, passing up an incentive offer of $26.7 million from the city of Ocala, Marion County and the state of Florida. The decision to hold off on the new facility was a prudent move, Liptak said.

"A new plant would have been a mistake," he said. "It didn't make any sense to build a new plant with the profits [from E-One] so low already."

Rick Cundiff can be reached at rick.cundiff@starbanner.com or at (352) 867-4130.