Hutchinson Closes Suspension Assembly Plant in Sioux Falls, SD

Hutchinson Technology Incorporated will close its Sioux Falls, South Dakota facility as part of its effort to restructure the company and reduce costs. The Sioux Falls operation assembles the suspension assembly components that are produced at the company’s other facilities and employs approximately 300 full-time employees.

"This was a difficult decision, and we understand the impact it will have on our employees, their families and the communities they live in," said Kathleen Skarvan, president of the company’s Disk Drive Components Division. "It is important to note that this closure is not a reflection on the employees or the performance of the Sioux Falls operation. This is a strong team of employees who have a variety of skills in manufacturing, technical and support functions. Their experience in producing quality products would be an asset to any employer, and we will work with the South Dakota Department of Labor as they provide job search and other assistance to our employees during this difficult time."

The company’s president and chief executive officer, Wayne Fortun, said:" Not only do we appreciate the outstanding effort that our Sioux Falls employees have put forth over the last 20 years, but we are also grateful for the support and cooperation that we have received from the City of Sioux Falls and the State of South Dakota."

Skarvan said that the company will consolidate its Sioux Falls assembly operation into its facilities in Eau Claire, Wisconsin and Hutchinson, Minnesota. "With reduced demand for our product due to the weakened global economic environment, we need to lower our cost structure," Skarvan added. "This consolidation will help lower our costs through greater efficiency and improved utilization of our other facilities. We expect to complete the consolidation over the next three months, during which we will provide an uninterrupted supply of suspension assemblies to our customers."

The company will offer severance and other benefits to the affected employees, and it estimates that its financial results for its fiscal 2009 second quarter ending March 29, 2009 will include $5 million to $13 million of asset impairment charges, severance charges and other costs related to the closure of its Sioux Falls facility.