Last edited 8:40 a.m., July 10, 2013Beloit, Wis.-based Regal Beloit Corp. (NYSE: RBC) on July 9 announced it will cease operations at the company's East Sunshine Street manufacturing plant.
The move affects some 330 employees, which will be laid off in phases during an 18-month transition, according to John Perino, vice president of investor relations for the publicly traded company. Regal Beloit expects to close the Springfield plant within that time frame as it transfers the manufacturing of motors and components from Springfield to other Regal facilities in the U.S. and Mexico.
Some employees will be offered benefits packages, and the company plans to aid workers in transitioning to other employment opportunities, including at Regal facilities in Missouri and placement in the Springfield-area community at other employers, according to a company news release. The city of Springfield's Department of Workforce Development also has committed to aiding displaced workers affected by the closure. In a release, city officials said the Missouri Career Center would deploy rapid response services such as online application assistance, resume development and job counseling.
The 2401 E. Sunshine St. plant builds motors it sells to other manufacturers to incorporate into HVAC systems. Regal Beloit purchased the facility in 2004 from General Electric Co., according to
Springfield Business Journal archives. Perino said he believes the company will move to sell the 320,000-square-foot plant after the transition, but a timeline has not been set.
Perino said the closure wasn't brought on by a lack of business regionally, as the company's plants sell products to clients in all of North America.
"It's partially just an overall softness in the HVAC market," he said. "The residential markets have been very soft, as well as people willing to invest money in their home HVAC system."
The company expects to incur roughly $22 million in combined expenses related to the closure, as it restructures and transitions to other facilities. The closure would cost the company approximately $4 million this year and $9 million in 2014, which includes employee termination costs, accelerated depreciation charges and other exit costs, according to a U.S. Securities and Exchange filing. The company also expects to incur $9 million in capital investment expenses, which Perino said includes needed equipment purchases to replace equipment at the plant that won't transport well or needs to be refurbished anyway.
Perino added the company hasn't fully calculated possible savings the consolidation would bring, but plans to discuss that in more detail during its July 31 second-quarter earnings call.
Regal Beloit posted first-quarter earnings of $50.7 million, up from $49.9 million in the same quarter ending March 31, 2012. Net sales were down 3.7 percent to $778.2 million from $807.9 million, according to a separate filing.
RBC shares were trading at $66.40 as of 8:30 a.m., compared to a 52-week range of $61 to $88.25.[[In-content Ad]]
