Columbus McKinnon Closing Lisbon Plant
YOUNGSTOWN, Ohio — As part of its restructuring plans, Columbus McKinnon Corp. announced it will close its operation in Lisbon, affecting 76 workers there.
Operations from the Lisbon plant will be relocated to the New York-based company’s plants in Virginia and North Carolina. The decision to close the plant was “a difficult one,” says the company’s chief financial officer, Gregory Rustowicz, but made sense in an effort to better serve customers and simplify its supply chain.
The plant manufactured hoists and did machining work for other Columbus McKinnon plants, so “there was a lot of product that was moving back and forth between Ohio and the Carolinas,” he says.
“We always thought we had too much footprint,” Rustowicz says. “And looking at what made sense from a corporate perspective, it made sense to move things in Lisbon facility to two other facilities.”
Columbus McKinnon designs, manufactures and markets motion control products, technologies and services for material handling, according to its website. In a statement, President and CEO Mark Morelli said the company is “continuously identifying opportunities to simplify our business.
“This consolidation will provide better service and an improved overall experience for our customers, while driving value,” Morelli said in the statement. “Over the last year, we have transformed the Wadesboro, N.C., and Damascus, Va., facilities into ‘assembly-manufacturing centers of excellence’ for wire rope and electric chain hoists, respectively. With the closure of the Lisbon, Ohio operation, we will transfer more product lines into these centers of excellence.”
The Lisbon plant closure will affect 59 union workers and another 17 staff members, according to the company.
“The folks there are very good at what they do,” he says.
Rustowicz couldn’t pinpoint an exact date for the closure, but says it would likely be during the summer as the restructuring process will take seven to 10 months. Columbus McKinnon expects the plant closure will cost some $3.5 million and estimates annual savings of about $5 million.
In 1995, Columbus McKinnon acquired the Lisbon plant as part of the Chester Hoist acquisition. In addition to its New York headquarters, the company conducts principal manufacturing at 18 locations around the world, including Lisbon, and manages 49 sales offices, distribution centers and warehouses, according to its fiscal year 2019 annual report.
The announcement comes nearly one year after Columbus McKinnon announced it would relocate operations from its Salem plant to its Wadesboro, N.C., plant. That move affected 18 hourly workers and 11 staff jobs. In 2010, the company invested $2 million to renovate the former Solar Tech building there.
On Thursday, Columbus McKinnon released financial results for its fiscal year 2020 second quarter, which ended Sept. 30. The company reports a 1.8% increase in revenue compared to the same period in 2018, “adjusted for divestitures and changes in foreign currency exchange rates driven by impact of 80/20 Process and solid projects business,” according to a release.
Net income was up 4.3% to $16.6 million, and its adjusted net income was up 8.1%. The company generated operating cash flow of $40 million in the quarter.
“We are executing to plan, and our results demonstrate the continued success of our Blueprint for Growth strategy and the implementation of our business operating system E-PAS (Earnings Power Acceleration System),” Morelli said in a statement. “The 80/20 Process, specifically strategic pricing and indirect cost reductions, along with factory closures provided approximately $9 million in operating income year-to-date of which $5.2 million was in the second quarter. This more than offset industrial market headwinds, higher medical costs, tariffs and the impact of divesting less profitable businesses. We now expect our Blueprint for Growth strategy to contribute approximately $18 million in operating income in fiscal 2020, up from our previous expectation of $12 million.”
Copyright 2022 The Business Journal, Youngstown, Ohio.