Flexsteel Industries Inc. has announced the closure of its New Paris, Ind., recreational vehicle seating manufacturing facility and the end of manufacturing operations at its Lancaster, Pa., facility. The company expects manufacturing at both locations to cease on November 9, 2008. The company intends to continue its warehousing and shipping operations in Lancaster.
According to Ronald J. Klosterman, Flexsteel’s president and chief executive officer, “The closure of these manufacturing facilities will more closely match our manufacturing capacity with our expected demand for residential and recreational vehicle seating products. Operations at our New Paris facility have been greatly impacted by the continued poor conditions in the recreational vehicle industry, especially for motor homes and travel trailers, which are the primary products manufactured at that facility. The demand for residential furniture products has continued to decline with the depressed housing market, the subprime mortgage default driven credit crisis and higher fuel costs. Flexsteel began operations in Lancaster in 1955 and in New Paris in 1982. We appreciate the long-term relationships with our skilled and dedicated employees at these locations and are saddened to bring these operations to a close. We wish all of our affected employees much success in the future.”
Products currently manufactured in the New Paris facility will be transitioned to Dubuque, Iowa, and the current Lancaster production will be transitioned to another Flexsteel manufacturing facility in order to meet customer shipment requirements.
Approximately 250 employees will be affected by this consolidation of manufacturing operations over the next two to three months. The company estimates the manufacturing consolidation and transition will be completed by December 31, 2008 and anticipates pre-tax restructuring and impairment charges in the first half of fiscal year 2009 to be in the range of $2 million to $2.5 million. Once the transition period is over, the company expects annual pre-tax savings of $3.5 million to $4 million from the manufacturing consolidation.
Flexsteel Industries, Inc. is headquartered in Dubuque and was incorporated in 1929. Flexsteel is a designer, manufacturer, importer and marketer of quality upholstered and wood furniture for residential, recreational vehicle, office, hospitality and healthcare markets. All products are distributed nationally.