SKF has announced the consolidation of its manufacturing facilities in North America, including the closure of its sites in San Diego, California and Baltimore, Maryland.
Restructuring costs are expected to amount to around SEK 300 million, of which around SEK 100 million will be accounted for during Q2 2016 and the remainder as they occur. The consolidation is expected to generate full year cost savings of around SEK 220 million from 2019, of which around SEK 70 million is expected to be achieved in 2018.
‘These activities will strengthen our position in North America, making us more competitive and better able to support our customers, by improving the utilisation of our manufacturing assets,’ said Luc Graux, president, bearing operations. ‘They also provide the foundation for investments in the further development of our manufacturing processes and technologies.’
Consolidations and relocations
Production will be transferred from the group’s site in Hanover, Pennsylvania, to Flowery Branch, Georgia. The move will consolidate the production of spherical roller bearings and large size roller bearings into the company’s existing bearing manufacturing operations in Flowery Branch.
Production of rings and seals for the aerospace industry will be relocated to Hanover from SKF’s existing factory in Baltimore, Maryland, which will be closed.
Investments totalling SEK 150 million will be made in upgrading machinery and manufacturing processes in Hanover and Flowery Branch.
Manufacturing and development of condition monitoring solutions will be moved from SKF’s existing site in San Diego, California, to other sites in Europe. A technical support team will remain in San Diego, but in a separate facility.
The Y-Bearing and Units production channels in Puebla, Mexico, which serve North American customers within the agriculture segment, will be closed, with production transferred to other SKF sites.
Consolidation of the sites in Hanover, Flowery Branch, Baltimore and San Diego is expected to take approximately 18-24 months. The closure of the Y-Bearing and Units production channels in Puebla, Mexico is expected to be completed during the summer of 2016.
This story is reprinted from material from SKF, with editorial changes made by Materials Today. The views expressed in this article do not necessarily represent those of Elsevier.