Rexnord Corp. said Friday it has “tentatively decided” to relocate its Indianapolis-based manufacturing operations next year to an existing Rexnord facility in Monterrey, Mexico—a move that could mean job losses for hundreds of local employees.
Rexnord is based in Milwaukee, Wisconsin, and has about 7,700 employees worldwide. The company makes bearings at its Indianapolis plant, located at 7601 Rockville Road.
The facility employs about 290 members of United Steelworkers Local 1999 plus an additional number of salaried employees.
“We understand, recognize and respect that in these circumstances discussion and openness with the Steelworkers Union is an important step,” Rexnord said in a statement e-mailed in response to an IBJ query.
“We have invited the union to join us in an open and frank discussion over this potential relocation and the impact it would have on Rexnord associates and their families. While no final decision has been made, completion of the potential relocation process would be targeted for April through June 2017,” the statement said.
Kelly Hugunin, Local 1999’s business representative, said company officials broke the news to union officials early Friday afternoon, then held a series of meetings later in the day to notify employees.
“They didn’t go into great detail, but they said it was because of labor costs,” Hugunin said.
Rexnord's announcement marks at least the second time this year that a manufacturer had decided to relocate its Indianapolis-based operations to Monterrey. Carrier Corp. announced plans in February to relocate Indianapolis production to Mexico over the next three years, resulting in the loss of about 1,400 local jobs.
Hugunin said Rexnord threated to close the Indianapolis plant four years ago during a contract negotiation. At that time, Hugunin said, the company wanted workers to accept a $6-per-hour pay cut, and it wanted to establish a second-tier wage scale—a lower starting wage for employees hired on or after October 2012.
The union negotiated a compromise: A second-tier wage scale would be put into place for a limited time, Hungunin said. That time period expired Oct. 5.
“That has just occurred, and now they’re announcing they’re moving the plant,” Hugunin said.
Rexnord did not immediately respond to a follow-up e-mail from IBJ seeking more details on the situation.
Hugunin said the union was aware that Rexnord’s Monterrey plant had enough capacity to take on additional work, and the union had been concerned for some time that Indianapolis production would move to that facility.