Modine announces plans to close Washington plant

By DAVID HOTLE

Golden Triangle News Service

WASHINGTON ? During a meeting of all the workers at the Modine Manufacturing Company in Washington April 16, it was announced that the corporation has conditional plans to close the plant within two years.

According to a press release from Modine, the decision is dependent on the conclusion of bargaining with the union at the Washington facility. The plan calls for the facility to close within a two-year time frame. It said the closure would impact about 245 full-time employees.

Outside the plant after the meeting dismissed, shortly before 3 p.m., employees just walked out to their vehicles in the parking lot and left. There was little talk among the workers and most declined comment.

?It kind of seems like it was expected,? worker Jessica Crockett, also a member of the union committee, said. ?Modine seems to have a track record of this.?

Crockett said the union only found out about the plans for the closure on April 16.. On April 24, 2014, Modine announced an 18-month plan to close its McHenry, Ill., plant.

The release said Modine plans to transfer Washington production to other facilities, including those in Nuevo Laredo, Mexico; Joplin, Mo.; and Jefferson City, Mo. The plant makes liquid charge air coolers, plate oil coolers, and fuel coolers for the automotive, commercial vehicles and off-highway markets.

Margaret Kelsey, a spokesperson for Modine, said Thursday the ?conditional? plans are based on the company?s obligation to discuss the decision with the union and the plans will be solidified after the discussions. She said there are no plans for immediate termination of personnel until the situation has been discussed with the union.

?We believe Modine made the right decision and we plan to share the reason for that decision with the union,? she said.

Kelsey said the decision came as the result of analysis of the market. She said the facility is ?not competitive? in the global market. She said the company had worked for years to try to increase the revenue generated in the Washington plant, but the results weren?t enough. She said the markets the Washington facility serves are in decline.

At this point no severance package has been agreed upon, Kelsey said. She said that bargaining with the union would determine what the packages would consist of. She also said the company hopes the employees stay with the company during the remaining two years.

?Stay tuned,? she said, when asked about the terms of severance package.

According to the release, Modine expects to incur about $2 million in expenses during the first quarter of the 2016 fiscal year, which begins July 1, mostly related to anticipated severance packages, The company also expects to incur total closure costs of about $3 million during the closure period. The company anticipates generating an annual savings of $9 million once the closure is complete in fiscal year 2018. The company also reports the consolidation of resources will result in additional revenue opportunities due to a more competitive cost structure.

?Closing operations is never easy,? Scott Wollenberg, regional vice president ? Americas, said in the Washington release. ?However, our analysis of Modine?s global product lines and North American manufacturing strategy led us to conclude that the best long-term solution for Modine and its shareholders is to consolidate all the Washington products into other North American facilities. Closing the Washington plant will help us rationalize production, maintain the scale we need in our manufacturing operations and improve our overall competitiveness and profitability. We are committed to making the transition as seamless as possible for our customers and to assist our affected employees during the transition.?

The statement from Wollenberg was identical on the McHenry release, with only the location changed.

In the past Modine has also closed plants in Logansport, Ind., Camdenton, Mo., and Pemberton, Ohio