Kelowna zero-emission company forced into layoffs after shift in US market and loss of major contract

Company forced into layoffs

Photo: Hexagon Purus

TERN RC8 crossing the San Fransisco Oakland Bay Bridge.

A Kelowna company says changes south of the border and a lost contract forced them to lay off 40 per cent of its workforce.

The president of Hexagon Purus, which has offices in Kelowna, Ontario, Dallas, Westminster, USA and Germany, confirms 50 employees have been let go.

"We have had to make the difficult decision to reduce our workforce for this business unit that did end up being 40 per cent of our people in Kelowna, in our facility in Ontario, California, and in our facility in Dallas, Texas," says Todd Sloan president of Hexagon Purus.

Sloan says the move isn't a reflection on their workers but a result of a lost contract with Daimler Trucks North America.

"We're super proud of everything we've accomplished to get this far. This is really in response to a weaker near-term market outlook."

Sloan says the company was preparing for a big growth curve when Daimler cancelled an important contract.

"That cancellation of Daimler, in combination with the U.S. presidential outcome, has created significant uncertainty in the market and dramatically worsened the near-term outlook for us. So we have been put in the position where we've had to make this very difficult decision to reduce our workforce to ensure the financial health of the company," said Sloan.

Sloan says Hexagon Purus produces battery-electric trucks, class six, seven and eight and most of their products are bound for California, Texas, New York, and New Jersey.

The trucks they produce are designed to focus on deliveries in the sub 320 kilometre range.

"Which is everything you need to get through an eight-hour shift of delivering either package delivery or a trailer. It's good for food and beverage operations, customers like UPS and Amazon we already work with on other technologies, so it's short haul. It's designed to work an eight-hour shift, come back to a base and trickle charge overnight, and then you repeat the next day," says Sloan.

Now Hexagon will be shifting its focus to the Canadian market or begin producing its trucks at their Dallas manufacturing plant.

"In general, our battery packs that we make here in the Kelowna factory contain battery cells that are made in Japan by Panasonic. So it's unclear whether or not those made in Japan cells will get impacted (by tariffs)," but Sloan says they have the ability to shift production south of the border if necessary.

"Like many companies, we're proud Canadians, and we believe that there is an excellent market in Canada for our product. So over the next one to two years, we'll be continuing to develop that," Sloan says.

Hexagon Purus believes they will be able to weather the storm and that their product and business fundamentals are strong.

"I don't think battery electric is a solution for every mobility application. I clearly see that natural gas and gasoline and other technologies are here to stay for quite a long time. But for some applications, our product is very well suited. And you can do that with a zero emission footprint," says Sloan