Two jobs announcements by public companies within days of each other last week resulted in a net job loss in Springfield of some 230 positions.
On July 9, Beloit, Wis.-based Regal Beloit Corp. (NYSE: RBC) said it would cease operations at the company’s East Sunshine Street manufacturing plant and lay off some 330 employees during an 18-month transition. Two days later, Bellevue, Wash.-based Expedia Inc. (Nasdaq: EXPE) committed to expanding its Springfield workforce by up to 100 and increasing its leased space by 10,000 square feet at Springfield-Branson National Airport.
Manufacturing hit Regal Beloit expects to close its Springfield plant by December 2014 as it transfers the manufacturing of motors and components from Springfield to other Regal facilities in the U.S. and Mexico, said John Perino, vice president of investor relations for the publicly traded company.
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 for sale 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 company would likely 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 Regal Beloit 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 as it replaces equipment at the plant that won’t transport well or needs to be refurbished anyway, Perino said.
He 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 closed July 11 at $65.36, compared to a 52-week range of $61 to $88.25.
Call center uptick A majority of Expedia’s new jobs would be in global financial operations support services, those supporting the call center’s online travel brands including Expedia.com and Hotels.com. To begin to fill the positions, the international company has scheduled a 9 a.m.–6 p.m. job fair July 30 at the Hilton Garden Inn, 4155 S. Nature Center Way, according to a news release.
With an existing employee base of more than 850 in Springfield – Expedia’s largest staff concentration outside of the company’s headquarters, according to Springfield Business Development Corp. officials who have aided in retention and expansion efforts – local employment would approach 1,000.
“Springfield offers an impressive caliber of talent, and we very much look forward to growing our team here,” said Frank Zijlstra, vice president of global financial operations for Expedia, in the release.
The majority of Expedia’s Springfield employees work out of space at the former Springfield-Branson National Airport terminal. Since moving into the terminal with 500 new jobs in 2010, when Expedia signed a five-year lease for 59,000 square feet, the company expanded its facility by 10,000 square feet in 2012 and has an additional 10,000 square feet under construction, according to the release.
Springfield Area Chamber of Commerce and SBDC staff, as well as airport leadership, visited Expedia’s corporate headquarters in February to advance the company’s growth plans. The Missouri Department of Economic Development will aid Expedia’s expansion by offering refundable tax credits via the Missouri Quality Jobs programs.
Expedia first established a presence in Springfield in 2001.
EXPE shares closed July 11 at $63.22, compared to a 52-week range of $43.44 to $68.09.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
