The A. O. Smith Corp. has announced plans to close its manufacturing facility in Scottsville, where it produces motors and parts for heating and air conditioning units.
The Scottsville operations will be transferred to Smith facilities in Juarez and Acuña, Mexico, by the end of next year. The shutdown will affect some 225 Scottsville employees.
The company is also closing its commercial compressor motor plant in Mebane, N.C., and a motor manufacturing facility in Budapest, Hungary. The North Carolina operations are being transferred to Acuña, while production at the Hungary plant will be moved to China.
Company officials say the decision to restructure operations is the result of a weaker than expected housing market that has negatively impacted its plant utilization rates. Over the last five years, one of the company’s larger customers has seen its market share decline considerably, which in turn has affected the plant activity in Scottsville and Acuña.
In addition, said Smith Chairman and CEO Paul W. Jones, “We believe the weakness in the housing market may be accompanied by slower growth in other market segments as we move through 2008, and although we would expect these softer markets to provide relief from high raw material costs, we expect to face historically high prices for steel and copper as we move forward.”
A. O. Smith acquired the 229,000-square-foot Scottsville plant in 1998 from General Electric and at one point employed up to 1,200 people.