SKF AB (Sweden; Stockholm: SKFA) announced the latest steps in its ongoing seal business restructuring, exacerbated by continued weakness in the North American auto industry.
The former Chicago Rawhide / CR Seals manufacturing plant in Elgin, Illinois will lose its automotive seal production. The product line is being moved to other SKF facilities: SKF Sealing Solutions plants in Hobart, Oklahoma and/or Seneca, Kansas; and Guadalajara, Mexico.
The Guadalajara plant, formerly CR Mexicana, manufactures a broad spectrum of automotive, truck and industrial seals. CR acquired full control of the plant in mid-1998.
As production migrates from Elgin, over a third of the plant's workforce will lose their jobs -- leaving just 270 of the current 430.
SKF will take a charge of SEK 35 million in this quarter for the move, followed by SEK 25 million in 2009. By 2010, the company said it expects to be saving in the range of SEK 30 million per year.
SKF acquired Chicago Rawhide / CR Industries in 1990.
In 2001, SKF started breaking up CR Seals and spreading the operations across existing SKF divisions.
In the move, automotive seals moved under SKF Automotive as it inherited CR Americas, CR Asia, and CR Automotive Europe.
Then in 2002, SKF closed the CR bearing seal plant in Bethlehem, Pennsylvania and moved production to RFT in Italy under the Electrical division.
In 2003, SKF closed the CR industrial seal plant in Franklin, North Carolina.
In 2005, SKF announced it was eliminating the Chicago Rawhide and CR brands in favor of its worldwide monobranding strategy as simply SKF.
Also in 2005, SKF closed the CR automotive seal plant in Springfield, South Dakota, even then citing weakness in the North American auto industry. Springfield's seals moved to Elgin and are now among the production being moved again.
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