Dubuque, Iowa-based furniture supplier Flexsteel Industries Inc. is closing two manufacturing plants and consolidating operations to other facilities. The move will impact around 250 workers.
The closure of an RV seating facility in New Paris, Ind., and a manufacturing plant in Lancaster, Pa., are slated for Nov. 9. Flexsteel said it intends to continue its warehousing and shipping operations in Lancaster.
“The closure of these manufacturing facilities will more closely match our manufacturing capacity with our expected demand for residential and recreational vehicle seating products,” said Ronald J. Klosterman, Flexsteel’s president and CEO. “Operations at our New Paris facility have been greatly impacted by the continued poor conditions in the recreational vehicle industry, especially for motorhomes and travel trailers, which are the primary products manufactured at that facility.
“The demand for residential furniture products has continued to decline with the depressed housing market, the sub-prime mortgage default driven credit crisis and higher fuel costs.”
The company said products currently manufactured in the New Paris facility will be transitioned to Dubuque, and the current Lancaster production will be transitioned to another Flexsteel manufacturing facility in order to meet customer shipment requirements.
Flexsteel estimates the manufacturing consolidation and transition will be completed by Dec. 31 and anticipates pre-tax restructuring and impairment charges in the first half of fiscal year 2009 to be in the range of $2 million to $2.5 million. Once the transition period is over, the company expects annual pre-tax savings of $3.5 million to $4 million from the manufacturing consolidation.