Flexsteel plant latest victim of down economy

Business

September 11, 2008

By JUSTIN CRIPE The Goshen News Thu Sep 11, 2008, 10:58 AM EDT

NEW PARIS, Ind. — A struggling economy has claimed another manufacturing casualty in Elkhart County.

The Flexsteel plant in New Paris will close its doors, leaving approximately 130 people without jobs. Those jobs will be moved to the company’s headquarters in Dubuque, Iowa. The company will also close a plant in Lancaster, Penn.

The New Paris plant manufactures seats for recreational vehicles and distributes them throughout the United States. The plant will close Nov. 9, according to company officials. A plant in Lancaster, Pa. will shutting down operation as well, though that plant is expected to continue its shipping and warehousing operations.

Ronald J. Klosterman, Flexsteel’s president and chief executive officer explained the cause for the closing in a press release, saying that “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.”

Klosterman added that the demand for residential furniture products has continued to decline with the depressed housing market and higher fuel costs.

The company estimates the manufacturing consolidation and transition will be completed by the end of this year and anticipates pre-tax restructuring and impairment charges in the first half of 2009 to be in the range of $2 to $2.5 million. Once the transition period is over, the company expects annual pre-tax savings of $3.5 to $4 million from the consolidation.

Flexsteel began operations in New Paris in 1982. The plant is located south of U.S. 6 and west of Ind. 15.

The impact of the closing is being felt in the close-knit community.

“It’s definitely not going to do any good to see 130 jobs gone in New Paris,” said Lindale Johns, owner of the Simply Sweets ice cream shop. “We will definitely feel an impact from it.”

“With all the other closings (in the RV industry), it’s just going to compound things,” said Jim Hawkins, owner of the New Paris Drug Store.

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Flexsteel plant latest victim of down economy

Gov. Mitch Daniels signed the right-to-work bill into law Feb. 1, allowing Indiana workers to opt out of paying mandatory union dues at union shops. What effect do you feel the new law will have on Indiana in the future?

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