Milwaukee-based Rexnord Corp. plans to move work currently performed in Indiana to facilities in Mexico and Texas, according to a letter posted on the United Steelworkers Local 1999 website.
The union represents workers at the Indianapolis plant affected by the decision. It is the second major closure the union has dealt with this year. The union also represents workers at the Carrier plant in Indianapolis, where work is being shifted to Mexico, eliminating 1,400 jobs. A video of officials announcing the closure of that facility went viral earlier this year.
Rexnord informed the union in October it had tentatively deceived to move the work to Monterrey, Mexico in an effort to save money. Rexnord later said some of the work would go to a facility in McAllen, Texas. The Indianapolis facility employs 350 people, according to the union.
The union said the company cited a $15.5 million net cost savings in the first year of the move and an additional $300,000 to $400,000 each year after that. The average hourly wage for Indianapolis employees is $25.20 and for the Mexico and Texas facilities it is $5.13, according to the union.
The two sides held a number of meetings over the last month to discuss potential cost saving measures that could keep the work in Indiana. The union said it offered a four-year wage and benefit freeze, a 20 percent pay cut for corporate employees and plant management, 15 percent for human resources and 5 percent for all other employees.
“The representatives of Rexnord have told your committee that the cost saving measures offered are not near enough to change the tentative decision to relocate the plant,” the union said posted on its website. “They informed your committee that we cannot make enough concessions to keep the plant here. The decision to move the plant is now final.”
The union said it has begun negotiating a severance package with the company and the two sides plan to meet again at the end of the month.
Rexnord did not respond to a call and email seeking comment Tuesday afternoon.
The company said in its most recent earnings release that its supply chain optimization and footprint repositioning initiatives were on track to deliver $30 million in annual savings, but the company also added 60 days to the project to ensure successful execution.
Todd Adams, Rexnord president and chief executive officer, said the company had been working towards reducing its footprint 20 percent over the last several years.
“I think it’s important to just sort of highlight the fact that this is a big deal,” Adams said of the overall project, according to a Seeking Alpha transcript. “We’ve been at it for a couple of years. We’re not going to let 30 days or 60 days impact what’s going to be great long-term structural savings.”
