Rexnord definitely moving Indy operations to Mexico, union says

Rexnord Corp. plans to proceed with the closure of its Indianapolis bearings plant, according to the union that represents most of the plant’s 350 or so employees.

Milwaukee, Wisconsin-based Rexnord announced last month that it had “tentatively decided” to move Indianapolis production to an existing Rexnord facility in Monterrey, Mexico.

“The decision is no longer tentative. They are going to move,” Kelly Hugunin, United Steelworkers Local 1999 business representative, told IBJ on Monday.

Hugunin said union officials met with Rexnord representatives Monday to discuss concessions, with the hope of keeping the Indianapolis plant open. Those concessions included union wage freezes, proposed salary cuts and other cost-saving ideas, Hugunin said.

“They took the proposal, looked at it and came back and told us, ‘It’s not nearly enough,’” Hugunin said.

“There were some cost savings for them, but not nearly the $15.5 million they needed to get to.”

Hugunin said the outcome was disappointing, but not unexpected.

“I don’t think we ever thought we had much hope of changing the company’s mind and getting them to reverse the decision,” Hugunin said. “We’re not naive.

Hugunin said Rexnord intends to move most of the Indianapolis work to Mexico, but some of the work will go to McAllen, Texas, where about 30 employees will do final assembly work.

Union officials and Rexnord representatives will meet again Tuesday to discuss severance packages for the Indianapolis employees, Hugunin said.

When it first announced the possibility of the Indianapolis plant closure, Rexnord said that if the move happened it would be between April and June of 2017.

Rexnord did not provide any different information during its talks with the steelworkers union on Monday, Hugunin said.

In a statement to IBJ on Monday evening, a Rexnord spokesperson said that the firm and union "came to the mutual agreement to move past our tentative decision and into the next stage of negotiations. Decisions like these are extremely difficult and we recognize the impact on our associates, their families and the Indianapolis community."

Following Rexnord’s announcement last month, Indianapolis Mayor Joe Hogsett expanded a city task force originally formed to help Carrier employees when that plant shuts down. Hogsett also pledged to claw back economic incentives that the city had offered Rexnord. The city did not offer a specific figure but has said that the clawback could be between $200,000 and $400,000.

Hogsett reacted to Monday’s news in  a written statement:
“I am incredibly disappointed in Rexnord’s decision to disregard the experience, the investment, the sacrifice and the good faith efforts of their long-time employees with the decision to uproot this plant and move 300 good-paying Indianapolis jobs to Mexico,” Hogsett said.

“Despite today’s announcement, we will continue to work with community and union leaders to connect affected workers with the job training and assistance they need during this difficult time. In addition, we will begin the process of seeking to recover for the taxpayers of Marion County any and all applicable financial incentives that have been provided to Rexnord over the years.”

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