Renaissance Manufacturing Group plans to close its Waukesha foundry on July 31 after selling the book of business for the plant to Grede, which plans to run the work from its other U.S. facilities.
The decision will eliminate 120 full-time jobs at the plant located at 1401 Perkins Ave. The facility’s shipping department will stay open for a period of time but will also close by Oct. 31.
“This sale occurs given current business conditions that we viewed as insurmountable,” RMG president Todd Martin wrote in a notice to state officials.
RMG will continue to operate its machining facility in Grafton, a vertical casting plant in Alabama and corporate offices in Menomonee Falls, co-founder and CEO Phil Knoebel said.
The Waukesha foundry produces parts used in light and heavy-duty trucks, construction, agriculture and railroad markets. Martin noted the company has seen a dramatic decrease in heavy truck sales at the same time as business costs have increased.
“This is occurring in a market where customers are demanding significant price decreases,” Martin wrote. “The combination of events has forced us into selling the business to a buyer better equipped with product-to-process fit for improved product cost.”
Knoebel said the business experienced a downturn in the second half of 2019. The management team expected that in a cyclical industry business would return this year, but the coronavirus pandemic limited demand and forced Knoebel to look at other options.
“We were losing $500,000 a month and you can’t just keep doing that,” he said. “It happens quick in a foundry because you’ve got so much fixed overhead to absorb.”
The cuts cover 33 salaried positions and 86 hourly union positions. The union workers are represented by United Steel Workers Local 3740.
The company said it would ensure all employees are paid earned wages and agreed upon benefits at the time of their termination.
Knoebel said eight employees will shift to jobs at other RMG facilities and others could continue find work with Grede. Knoebel has also talked with other area manufacturers about work for employees.
“There’s still jobs out there for people, especially for skilled people,” he said.
This isn’t the first time the Waukesha foundry has faced the prospect of closing. Illinois-based Navistar considered shutting the plant down in 2015 as part of a cost savings program. Instead, the company sold the plant, which has been in operation for more than 100 years, to Renaissance Manufacturing Group.
RMG had invested in the facility, cleaning up a testing lab and repurposing an unorganized maintenance area for additional machine and warehouse work.
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