Modine manufactures vehicular heating and cooling technology products, heating, ventilation and air conditioning equipment, and off-highway and industrial equipment and refrigeration systems.

Modine to Close Illinois Plant, Focusing on Cost-Competitiveness

April 27, 2014
Vehicular heating/cooling products will be transferred to plants in Mexico, Tennessee, Missouri Consolidating North American parallel-flow heat exchanger manufacturing 135 workers affected Emphasis on “operating scale production”

Racine, Wis.-based Modine Manufacturing Company will close its manufacturing plant in McHenry, Ill., within 18 months, according to its latest announcement, a decision it said would affect about 135 full-time workers. Modine said it provide severance benefits to the affected employees, and will work state and local agencies to offer employment assistance and other services.

The McHenry plant’s output — parallel and serpentine condensers, oil coolers, and radiators for automotive, commercial, and off-highway vehicles, and building HVAC customers — will be transferred to other plants in Nuevo Laredo, Mexico; Lawrenceburg, Tenn., and Jefferson City, Mo.

The company said its decision to close the Illinois operation is a product of its “focus on operating scale production facilities… to remain cost-competitive.”

“Closing operations is never easy,” according to regional vice president-North America Scott Wollenberg. “However, our analysis of Modine’s global product lines and North American manufacturing strategy led us to conclude that the best long-term solution for Modine and its shareholders is to consolidate all North American parallel flow heat exchanger manufacturing into other North American facilities.

“Closing the McHenry plant will help us rationalize production, maintain the scale we need in our manufacturing operations and improve our overall competitiveness and profitability,” Wollenberg said.

Modine said it expects to incur a charge of approximately $2 million in Q4 2014, primarily involving the anticipated severance payments and fixed asset impairment charges. Total closure costs are estimated at approximately $5 million over the entire closure period.

In addition, Modine forecasts annual savings of at least $5 million once the closure is complete in FY 2016.

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